<p>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.</p>

<p>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.</p>

<p>Multiplex has been appointed the builder, and construction is now underway.</p>

<p>[smartcode_project:default project_id=108274 project_image_fid=365784]</p>

<p>Since its first project, Central Equity has delivered more than 85 residential developments with a combined end value exceeding $8 billion.</p>

<p>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.</p>

<p>“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.</p>

<p>He said NAB’s early support was instrumental in helping establish the company’s development model.</p>

<p>“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.</p>

<p>“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.”</p>

<p>[smartcode_project:default project_id=108274 project_image_fid=365771]</p>

<p>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.</p>

<p>Recognising changing demographics and lifestyle preferences, the company began developing high-rise residential projects designed to bring permanent residents into the city centre.</p>

<p>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.</p>

<p>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.</p>

<p>The developer said the Palmera apartment tower reflects its long-term view of the Gold Coast as a growing and increasingly diversified economy.</p>

<p>[smartcode_project:default project_id=108274 project_image_fid=365768]</p>

<p>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.</p>

<p>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.</p>

<p>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.</p>

<p>[smartcode_project_cta:default project_id=108274]</p>


Joel Robinson

NAB funds $1 billion Surfers Paradise apartment development, Palmera

<p>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.</p>

<p>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.</p>

<p>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.</p>

<p data-end="792" data-start="529"><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" /></p>

<p data-end="1040" data-start="794">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.”</p>

<p>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.</p>

<p>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.</p>

<p>Planning documents show the development would consist of a part-13, part-39 storey tower form positioned above a four-storey podium.</p>

<p>“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.</p>

<p>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.</p>

<p>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.”</p>

<p><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" /></p>

<p>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.</p>

<p>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.</p>

<p>“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.</p>

<p>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.</p>

<p>“The broader precinct is undergoing significant change, with a mix of existing mid-rise buildings and newer high-density developments,” the report stated.</p>

<p>“Recent and approved projects indicate a consistent shift toward taller built form, typically organised as tower-and-podium typologies with more active ground levels.”</p>

<p>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.</p>

<p>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.</p>

<p>&nbsp;</p>

<p>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.</p>

<p><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" /></p>

<p>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.</p>

<p>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.</p>

<p>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.</p>

<p>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.</p>


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">
<p data-end="577" data-start="264">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.</p>

<p data-end="577" data-start="264">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.</p>

<p data-end="577" data-start="264"><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" /></p>

<p><em>Interior view from the Northern Building Penthouse overlooking the park</em></p>

<p>&nbsp;</p>

<p data-end="1070" data-start="809">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.</p>

<p data-end="1246" data-start="1072">Time &amp; Place acquired the former David Jones building in 2024, marking the first time the property had changed hands in around 50 years.</p>

<p data-end="1483" data-start="1248">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.</p>

<p data-end="1854" data-start="1485">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.”</p>

<p data-end="2059" data-start="1856">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.”</p>

<p data-end="2318" data-start="2061">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.</p>

<p data-end="2486" data-start="2320">Planning documents show the scheme would comprise a mix of heritage apartments, new-build apartments, townhouses and penthouses.</p>

<p data-end="2486" data-start="2320"><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" /><em>Interior View of the Heritage Building Apartment</em></p>

<p data-end="2814" data-start="2488">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.</p>

<p data-end="3188" data-start="2816">&nbsp;</p>

<p data-end="3625" data-start="3404">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.</p>

<p data-end="4003" data-start="3627">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.</p>

<p data-end="4149" data-start="4005">Wardle’s design heavily references the site’s industrial and heritage history, while also responding to the surrounding Surry Hills streetscape.</p>

<p data-end="4488" data-start="4151">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.</p>

<p data-end="4609" data-start="4490">The report also outlines the project’s relationship with Eddie Ward Park and the broader landscape context of the area.</p>

<p data-end="4894" data-start="4611">“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.</p>

<p data-end="5090" data-start="4896">The architects said the proposal sought to “rebind built form to Country” through landscape, materiality and the adaptive reuse of the heritage structure.</p>

<p data-end="5090" data-start="4896"><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" /></p>

<p data-end="5304" data-start="5092">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.</p>

<p data-end="5498" data-start="5306">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.</p>

<p data-end="6154" data-is-last-node="" data-is-only-node="" data-start="5806">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.”</p>

<p>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.</p>

<p>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.</p>

<p>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>.</p>
</section>


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

<p>The residential transformation of St Kilda Road is set to continue into with more new apartment plans for the sought-after boulevard.</p>

<p>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.</p>

<p>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.</p>

<p>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.</p>

<p>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.</p>

<p>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.</p>

<p>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.</p>

<p>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.</p>

<p>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.</p>

<p data-end="345" data-start="110">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.</p>

<p data-end="689" data-start="347">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.</p>

<p data-end="689" data-start="347">Dexus recently secured approval for its slice of St Kilda Road, while Gurner also has approved plans for the precinct.</p>


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

<p>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.</p>

<p>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.</p>

<p>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.</p>

<p>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.</p>

<p>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.</p>

<p><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" /></p>

<p>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.</p>

<p>“Our target for this exceptional development is local and overseas buyers, including first-home buyers, downsizers and investors,” Choong said.</p>

<p>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.</p>

<p>“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.</p>

<p><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" /></p>

<p>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.</p>

<p>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.</p>

<p>The proposal also includes a commitment for 10 per cent of residential floor space to be allocated toward affordable housing through a monetary contribution.</p>

<p>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.</p>

<p><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" /></p>

<p>“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.</p>

<p>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.</p>

<p>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.</p>

<p>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>.</p>

<p><em>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></em></p>


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

Housing

<html><body>
<p>I’m struggling to find a time when the bureaucrats and politicians struggled as much as they presently are when trying to define what exactly is happening to the Sydney property markets – please note that I have used plural as against the popular and misrepresented singular definition.</p>
<p>Australia’s head cashier Joe Hockey is having an absolute shocker given he hails from a family that has a rich real estate heritage. For example, last week he stated that more houses were needed to fix the home affordability issue. “I like many others, if you have a home, if you’re already there with a mortgage; you wonder how your children are going to get into it.” Well Joe, for starters I would immediately slash the foreign buying policy where you allow 100% of all new housing developments to be sold offshore to foreign buyers.</p>
<p>Then one week later announced that he “totally understands” housing in Sydney and Melbourne is expensive and advised first home buyers to “get a good job that pays good money. ”If you go back 10 years first home buyers represented 10% of the overall market – today they are struggling to record a 5% market participation. The Sydney and Melbourne property markets are overwhelmingly being driven by property investors and foreign buyers.</p>
<p>The real truth of the matter is that the Coalition and ALP don’t care about the buyers, or where they come from for that matter, this is all about strengthening the economy where real estate is now doing all the heavy lifting. The crux of the matter is that the property sector now contributes more to Australian gross domestic product (GDP) than mining. The property sector is estimated to generate 11.5% of GDP, employs 1.1 million Australians and pays $72.1 billion in state, federal and local real estate taxes each year.</p>
<p>Then we have Australia’s head teller Glenn Stevens pointing at another rate cut due to a weak economy given that the Australian economy is now weaker than forecast two years ago. In 2013 the projection was that the economy would be growing at a rate of 2.5% to 4% although by mid-2015 it will be lucky to post a growth rate of 2.5%. Stevens also commented this week that he is concerned about Sydney’s booming house prices – you see he used the term house although houses in certain parts of Sydney are not doing that well when compared to apartments.</p>
<p>Our research division has been recording some interesting Mosman ‘house’ sales.</p>
<ul>
<li>Stanley Avenue Mosman sold in 2010 for $12.000 and resold in 2015 for $12.300</li>
<li>Coronation Avenue Mosman sold in 2012 for $4.200 and resold in 2015 for $4.125</li>
<li>Botanic Road Mosman sold in 2013 for $2.750 and resold in 2014 for $2.550</li>
<li>Parriwi Road (apartment) sold in 2010 for $1.050 and resold in 2014 for $1.010</li>
<li>Parriwi Road (apartment) sold in 2010 for $2.250 and resold in 2014 for $2.150</li>
<li>Bradleys Head Road sold in 2007 for $5.400 and resold in 2015 for $5.100</li>
<li>Raglan Street Mosman sold in 2006 for $4.500 and resold in 2015 for $4.750</li>
</ul>
<p>The problem is purely that house prices are bundled as against separating houses from apartments and investors from owner occupiers. Let’s not start on what part the foreign buyers play in this equation given nobody has really bothered to measure this participation rate but I would add that it’s huge and much, much higher than the federal government ever envisaged (when they do get around to looking).</p>
<p>Glenn Stevens was using the HSBC research that found Australian house prices had risen 24 per cent in the past three years, though the gains had been mostly confined to Sydney and Melbourne – so why then call this Australian house prices? Sydney had jumped 39 per cent and Melbourne prices were up 22 per cent bringing the average price growth for the rest of the country at 10 per cent.</p>
<p>The real problem Australia is facing is getting the economy stimulated and thus far all the monetary measures have been a dismal failure. Yet again, the problem is contained directly in Canberra and the refusal to implement reform so on that basis I can see where Glenn Stevens is coming from.</p>
<p>Cast your mind back to 2008 when Ken Henry presented the Henry Tax Review (the Rudd government held on to it until 2010) – we need to remember what Ken Henry said at the time “Ken Henry warns of looming taxation crisis”, and said that need to change is urgent. In 2014, he warned that the Abbott government urgently needs a tax and welfare package to head off an imminent budget crisis.</p>
<p>Well we have a budget crisis and no tax reform and as Ken Henry put it “there will be a day of reckoning.” One only has to ask a simple question – where would the Australian economy be today had the Henry Tax Review been implemented?</p>
<p>So what we have is politicians only interested in re – election so any thought of reform is immediately removed until we get hit with a major economic downturn. The Henry Tax Review was designed to drive the economy and therefore minimise the likelihood of another economic downturn as experienced with the Global Financial Crisis. Governments don’t pay payroll tax however if you asked businesses what they would do with the savings if it were to be abolished – you would see a much different Australian economy than we are seeing presently.</p>
<h5>MOSMAN – 2088</h5>
<p>• Number of houses on the market this time last year – 85</p>
<p>• Number of houses on the market last week – 61</p>
<p>• Number of houses on the market this week – 55</p>
<p>• Number of apartments on the market this time last year – 66</p>
<p>• Number of apartments on the market last week – 38</p>
<p>• Number of apartments on the market this week – 41</p>
<h5>CREMORNE – 2090</h5>
<p>• Number of houses on the market this time last year – 8</p>
<p>• Number of houses on the market last week – 6</p>
<p>• Number of houses on the market this week – 7</p>
<p>• Number of apartments on the market this time last year – 9</p>
<p>• Number of apartments on the market last week – 13</p>
<p>• Number of apartments on the market this week – 11</p>
<h5>NEUTRAL BAY – 2089</h5>
<p>* Number of houses on the market this time last year – 5</p>
<p>• Number of houses on the market last week – 5</p>
<p>• Number of houses on the market this week – 3</p>
<p>• Number of apartments on the market this time last year– 46</p>
<p>• Number of apartments on the market last week – 23</p>
<p>• Number of apartments on the market this week – 29</p>
<p> </p>
<p><em><span>ROBERT SIMEON</span> is a director of </em><em><a href="https://www.rwm.com.au/" target="_blank" title="RWM" rel="nofollow">Richardson Wrench Mosman and Neutral Bay</a> </em><em>and has been selling residential real estate in Sydney since 1985. <br>He has also been writing real estate blog </em><em><a href="https://www.rwm.com.au/news/" target="_blank" title="Virtual Realty News" rel="nofollow">Virtual Realty News</a> </em><em>since 2000. </em></p>
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robertsimeon-hRNTwJyXkQ

It’s about the economy not the property buyers: Robert Simeon

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<p><span>GUEST OBSERVATION</span></p>
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<span style="line-height: 1.3em;">Australia needs to have a housing conversation that isn’t just about housing “bubbles”, profits and investment properties. Sadly, we punch well above our weight in international measures of poor housing affordability, and increasing numbers of Australians can’t afford their rents or mortgages.</span><br><div class="body grid-eight">
<p>Even a modest increase in house prices will make things even tougher for these Australians – but importantly, do we reliably know who they are, where they live, and how extreme their affordability problems are?</p>
<p>Our <a href="https://www.tandfonline.com/doi/full/10.1080/08111146.2015.1034853" target="_blank">new research</a> reveals some poorly understood distinctions in unaffordable housing. Some people appear to be “slipping” in and out of housing affordability problems, while others remain “stuck” with them for long periods, or even a lifetime.</p>
<p>When we look at housing affordability in this way and compare these two groups of people, these “slipper” and “sticker” groups are shown to be very different within Australian society, with different intervention needs implied.</p>
<h2>Limitations of the 30/40 rule</h2>
<p>To address housing affordability and target assistance we usually rely on data on the prevalence and nature of unaffordable housing. The most widely used measures of housing affordability are based on simple ratios, for example, the 30/40 measure. This approach classifies people as being in unaffordable housing if they are in the lower 40% of the income distribution and their rent or mortgage payments exceed 30% of their income.</p>
<p>Such a simple, straightforward measure - that classifies people as being either in unaffordable housing or not – is undoubtedly useful, and outside of the housing research community, data using these measures are rarely questioned. But it’s useful to think about that data a little more critically.</p>
<p>The picture of housing affordability portrayed by most of the measures we (and policy makers) rely on is a snapshot – a point-in-time collection of people’s ability to afford their housing (on Census night for example). Importantly, it’s a very blunt measure. In fact, when we look more closely at people’s experience of affordability problems we see that the snapshot is a pretty poor predictor of longer-term unaffordability.</p>
<p>For a great many households, both income and housing costs - and where they sit relative to other households - change a lot over time. This causes people to slip in and out of unaffordable housing. In a large Australian sample, we see that hidden within the segment of the population classified as being in unaffordable housing in any one year, fewer than half were classified in the same way the next year. Because the total number of people counted in unaffordable housing is stable, it points to a limitation in the way that we measure housing affordability.</p>
<h2>Slippers and stickers</h2>
<p>By following people’s income and housing costs each year for a five year period, we classify stickers as being in unaffordable housing (using the 30/40 rule) in every one of the five years. To be classified as a slipper, people must have made at least one transition into, and one out of, unaffordable housing over the five year period. Slippers outnumber stickers three to one, and therefore affordability initiatives may be more concentrated upon the needs of slippers.</p>
<p>Compared to slippers, stickers have much lower incomes and employment rates. Around 60% of stickers have a disability, and twice as many are carers for other people in their household. Looking deeper, three quarters of those stuck for long periods in unaffordable housing are women, they also tend to be much older than slippers, and more likely to live alone.</p>
<p>This description points to what some might call a vulnerable group of people or even an “underclass” perpetually facing housing affordability issues and, most likely subject to the consequences of this, such as limited financial resources and stress.</p>
<p>It is interesting to note that the characteristics of the sticker population are very similar to those of Australia’s public housing tenant population, but because public housing largely addresses affordability by rent capping, stickers are most likely to be private renters and low income mortgage holders.</p>
<p>This means that, in addition to being highly vulnerable, many stickers are likely to receive little or no government assistance with their housing costs. It also implies a pressing need to improve the supply and affordability of housing in the private sector - via the taxation system or the land supply system.</p>
<p>Rather than looking at housing affordability as one problem, the distinct differences observed between Australia’s slippers and stickers imply a need to focus particular attention and interventions on stickers. We also need to better understand how people enter and exit unaffordable housing and what we can do to prevent people becoming stuck.</p>
<p>In the bigger picture our findings describe real social inequalities in Australia that are present and persistent. It reminds us that the conversation we need to have about housing affordability in Australia isn’t just about the positives of “housing bubbles”, but also needs to be about how to address the serious affordability problems of the growing group of (often already vulnerable) Australians who are stuck.</p>
Emma Baker is <span style="line-height: 1.3em;">Reader in Housing at the University of Adelaide and can be contacted <a href="https://www.adelaide.edu.au/directory/emma.baker" target="_blank">here</a>. Rebecca Bentley is </span><span style="line-height: 1.3em;">Senior lecturer at the University of Melbourne and can be contacted <a href="https://www.findanexpert.unimelb.edu.au/display/person99174" target="_blank">here</a>.</span>
<h4><em>DISCLOSURE STATEMENT</em></h4>
<p><em>Emma Baker receives funding from the Australian Research Council FT140100872.</em></p>
<p><em>Rebecca Bentley receives funding from the Australian Research Council and National Health and Medical Research Council. </em></p>
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po-LsXgBTHBmX

‘Slippers’ and ‘stickers’: the hidden victims of rising house prices

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<p>With each passing week, the rhetoric on housing issues becomes less and less rational. On topics such as affordability and negative gearing, we have something akin to a form of mass hysteria. Apparently sensible people are making statements which, years from now, will cause them great embarrassment when they look back.</p>
<p><span style="line-height: 1.3em;">With the media we have in Australia, it’s almost impossible to have a rational debate on any subject. Media runs with its pre-conceived story lines and the only people who get heard are those willing to make outlandish comments that fit the ordained theme – such as, the Great Australian Dream is dead or negative-geared property owners are all rich bastards being subsidised by the taxation system or there’s a bubble, whatever that means.</span></p>
<p><span style="line-height: 1.3em;">Attention-seekers like economists know how to grab a bit of limelight – pander to media’s obsession with its pre-determined headlines, all of them based around Sydney’s property prices.</span></p>
<p><span style="line-height: 1.3em;">The great peculiarity of this “debate”, for lack of a better word, is that it’s happening when we don’t have a property boom or a national affordability problem. We have only one major city with boom-time price growth (although tame relative to 2002-2003). </span></p>
<p><span style="line-height: 1.3em;">If that one city was Perth or Adelaide, we wouldn’t be having this discussion. Media is all agog about it because the one elevated city market is Sydney and we have a hopelessly Sydney-centric media.</span></p>
<p><span style="line-height: 1.3em;">Around 20 million Australians live outside Sydney and they’re all watching this runaway hysteria about real estate with mounting bemusement. </span></p>
<p><span style="line-height: 1.3em;">It’s difficult for people in Perth and Hobart, where markets are going backwards, to relate to the notion that they need to accept lending restrictions because Sydney allegedly has a problem. </span></p>
<p><span style="line-height: 1.3em;">In Darwin, where vacancies are high, rents have dropped 5% in the past year and apartment prices are down 4%, people are wondering what the fuss is all about.</span></p>
<p><span style="line-height: 1.3em;">And in Canberra, which is producing similar statistics to Darwin, they must be scratching their heads at the panic that’s driving commentary three hours up the road in Sydney.</span></p>
<p><span style="line-height: 1.3em;">One of the absurdities of the affordability “debate” is that people keep referring to the Sydney median price and how first-time buyers can’t afford it. Sydney’s median is too high for a first-home buyer, therefore Australia has an affordability crisis. </span></p>
<p>The latest is serial publicity seeker and failed politician Graham Richardson, who is sadly typical of electronic media celebrities – a big ego, a loud voice and zero knowledge of important subjects. </p>
<p>His real estate rant on Sky News this week was a cacophony of misinformation. He said “the mean” dwelling in Sydney cost “a million dollars”, when the true figure is $752,000. He said this was “completely and utterly out of the reach of the new player”. But first-time buyers don’t buy at the median price – they buy below the median price, in Sydney and everywhere else. </p>
<p>A median price of $752,000 means half of all sales are below that figure – and in many Sydney locations it’s a lot below that figure. The No.1 most popular suburb in Sydney for buyers of dwellings is Blacktown (the suburb) – close to 1,000 homes changed hands there in the past 12 months, at a median price for $385,000 for apartments and $535,000 for houses (which means half of all sales were lower than those figures). Blacktown (the municipality) is also the No.1 LGA in NSW for population growth and the No.1 venue for first-home buyers. </p>
<p><span style="line-height: 1.3em;">There are hundreds of similar examples across the Sydney metropolitan area. So Richardson’s throwaway line that “it’s a grim future” for buyers in Sydney is nothing more than sound-byte generation from a pointless talking head. </span></p>
<p>He did mention that it wasn’t so bad elsewhere in Australia (a brief acknowledgment there is life in Australia beyond Sydney) and he mentioned Brisbane. He said prices were okay there because “there’s been no increase for years.” Again, wrong. But, then, being wrong in a loud voice is how “Richo” makes his way in the world. Sad.</p>
<p>Meanwhile, some attention-seeking behaviour of The Greens has added to the morass that is real estate coverage.</p>
<p>The Greens can be competent advocates of important issues like environment (though less so since Bob Brown retired) but they will never be serious contenders for government while they remain economically illiterate. Their latest clanger is the claim that scrapping negative gearing would raise $42 billion for government over 10 years. It would do nothing of the sort. </p>
<p>They’ve misunderstood the budget impacts, even without considering the fact that state and federal budgets would be losers if negative gearing was scrapped and people stopped buying investment properties, because of the lost revenue in stamp duty, capital gains tax and land tax. </p>
<p>The impact on rentals, for people who are unable to buy homes, would be alarming, as it was in the 1980s when negative gearing was (briefly) disallowed. </p>
<p>But the nation overall and the federal budget long-term would be the biggest losers, because if people aren’t investing to fund their retirement years, the nation has to fund them with pensions – and with our ageing population and the fragile state of the federal budget, that’s not sustainable. </p>
<p>The Greens have characterised negative gearing as low-income taxpayers subsidizing rich people – and that is simply dishonest. Three-quarters of people who own investment properties are average income earners who own just one property. </p>
<p>Most of them believe that investing for their retirement is doing the right thing by the nation. In condemning them with this poorly-considered and downright deceitful announcement, the Greens are making a serious error of judgment.</p>
<p><em>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></em></p>
<p>Terry is presenting a free webinar with Property Observer editor at large Jonathan Chancellor on Tuesday June 16 at 12.30pm titled on why research is the key to successful property investing in 2015. Sign up here.</p>
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terryryder-YECXbqmri2

Housing rhetoric becoming less rational: Terry Ryder

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<p><span style="line-height: 1.3em;">John Flavell, CEO of home loan experts Mortgage Choice, while not denying the property market is hot in parts of Sydney and Melbourne, says we are not experiencing a property price bubble.</span></p>
<p>"To state that a property bubble exists in Sydney and Melbourne you would have to believe we will see a sudden and dramatic reduction in property prices over a very short period of time.</p>
<p>"Property prices, like the prices for anything else, are driven fundamentally by supply and demand.</p>
<p>"Is that going to change rapidly or significantly in either Sydney or Melbourne and cause a bust?," he asked. </p>
<p><span style="line-height: 1.3em;">"In Australia we have a modest rate of population growth driving modest increases in property demand. </span></p>
<p><span style="line-height: 1.3em;">"We have had historically low levels of new construction keeping supply tight, especially in Sydney and Melbourne. </span></p>
<p><span style="line-height: 1.3em;">"We continue to see high rates of urbanization, particularly in NSW and Victoria, as our population is attracted and retained by our largest cities given the employment opportunities and the amenities they provide.</span></p>
<p><span style="line-height: 1.3em;">"If you are prepared to believe basic rules of supply and demand do not apply to the Sydney and Melbourne property markets, and if you believe the population is about to go backwards overnight. </span></p>
<p><span style="line-height: 1.3em;">"If you believe that we will be able to manufacture new land close to the heart of our busiest urban centres, if you believe that we are all about to flee to the country and there is a fleet of trains that could take us there and if you believe we all want to move our families into studio apartments and forego our houses, then you just might believe that a property bubble exists in Sydney and Melbourne.</span></p>
<p><span style="line-height: 1.3em;">"Property in Sydney and Melbourne is expensive, but it is not about to get any cheaper," he said.</span></p>
<p><span style="line-height: 1.3em;">Meanwhile the demand for fixed rate home loans ticked up a little during May, after the Reserve Bank’s decision to cut the cash rate to 2%.</span></p>
<p>Mortgage Choice found fixed rate home loans made up 18.17% of all loans written in May - up from 17.91% in April.<br><br>Its chief executive John Flavell says the demand accompanies speculation that Australia was potentially now at the bottom of the rate cycle.<br> <br>“Following last month’s rate cut, the domestic economy has started to shows signs of improvement. Consumer sentiment improved dramatically, while business conditions retraced some of the gains reported in March.”</p>
<p><span> </span></p>
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jchancellor-FAypfDUnLy

No bubble says Mortgage Choice chief John Flavell

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<p>Investor activity has surged over recent years and now shows that in March 2015, investors committed to $12.9 billion in housing finance.</p>
<p>By comparison, investment mortgage commitments reached a recent low of $6.3 billion in April 2011.</p>
<p>The recent rise to $12.9 billion has seen the value of commitments rise 105% in less than 4 years.</p>
<p>While state data is seasonally adjusted, these markets tend to be a little more volatile. Nevertheless, it shows $13.5 billion worth of commitments in March 2015.</p>
<p>A state by state breakdown shows that nationally, NSW accounted for 46.0% of all investor mortgage commitments. The value of commitments in NSW was greater than the value of all states and territories combined except for WA. Of particular note is the fact that this data largely reflects what is happening in Sydney which experienced a significant rise in investment lending over the past 3 years.</p>
<p>Across all states the recent low in investment lending has been in either January or February of certain years and we’ve found that this time of year is a seasonally slower period for mortgage lending.</p>
<p>After APRA wrote to Australian banks, credit unions and building societies late last year re-affirming sound residential mortgage policies we have recently started to see many banks change their lending policies.</p>
<p>A large focus of these changes has been around investment mortgages and over the coming months we should eventually see investment lending start to slow.</p>
<p><a href="/images/2015/06/04/700_Statebreakout.jpg" target="_blank">Click to enlarge</a></p>
<p><span><img src="/images/2015/06/04/700_Statebreakout.jpg" alt=""></span></p>
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<p><a href="/images/2015/06/04/700_lending.jpg" target="_blank">Click to enlarge</a></p>
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<p><span><img src="/images/2015/06/04/700_lending.jpg" alt=""></span></p>
<p><span>NSW </span>– in March 2015, investors committed to $6.2 billion in mortgages, a year-on-year increase of 37.2%. Over the past 3 years the value of investment mortgage commitments has increased by 155%. If you remove refinances, investors accounted for 60.0% of all new lending in NSW in March 2015.</p>
<p><span>Vic </span>– investors committed to $3.1 billion in mortgages in March, a 17.1% year-on-year rise. Investors accounted for 48.6% of new lending in March and the value of commitments is 70% higher over the past 3 years.</p>
<p><span>Qld </span>– at $2.2 billion in March, investor lending has risen by 43.1% year-on-year and is 69% higher over the past 3 years. Investors accounted for 47.2% of new lending over the month.</p>
<p><span>SA </span>– investment lending has increased by 28.3% year-on-year to March 2015 to $508.8 million and has increased by 32% over the past 3 years. Investors accounted for 43.0% of new lending in March 2015.</p>
<p><span>WA </span>– investors accounted for 39.0% of new mortgage lending over the month with $1.1 billion in commitments. Investor mortgage commitments have increased by 4.5% year-on-year and by 31% over the past 3 years.</p>
<p><span>Tas </span>– investors currently account for 30.5% of new mortgage lending <span>$</span>with a total of $70.8 million. The value of investment commitments is 21.3% higher over the year and has increased by 41% over the past 3 years.</p>
<p><span>NT </span>– at $103.5 million in March 2015, investment lending is -1.1% lower over the year. Investment lending has increased by 14% over the past 3 years and investors currently account for 55.3% of all new mortgage lending.</p>
<p><span>ACT </span>– at $168.3 million in March 2015, investment lending is 2.9% higher over the year. Investment lending has increased by 8% over the past 3 years and investors currently make-up 41.8% of all new mortgage lending.</p>
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ckusher-ujnxiKuFQs

Investment lending set to slow: Cameron Kusher

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<p>Tony Abbott is absolutely right. There’s something I never imagined I would ever say, but the Prime Minister is spot on with his comments this week about house prices. He said on Monday he thought rising house prices were a good thing.</p>
<p>He sought to make his comments as a home-owner at Forestville in the northern beaches area of Sydney, as well as the nation’s Prime Minister.</p>
<p>The Federal Government has got a lot wrong on real estate, with its pointless inquiries and its equally pointless targeting of foreign investors in a sabre-rattling attempt to be seen to be taking strong action.</p>
<p>But Abbott was right on the mark about house prices. It’s long overdue for someone in authority to make the point that for people who own homes, which means the vast majority of Australian households, rising property values are a good thing. </p>
<p>They’re also a good thing for the nation.</p>
<p>For way too long, mainstream media has characterised any rise in house prices as a national crisis. It’s been the dominant tone in newspapers since the start of the century, which began with a genuine national property boom from 2001 to 2003, and it’s reached the point of absurdity more recently with coverage of the Claytons boom centred on Sydney.</p>
<p>Media has also lost all sense of balance with its treatment of the affordability issue. They’ve turned first-home buyers into a kind of protected species, to be fussed over to the exclusion of everyone else, including the seven out of 10 households who own their homes and want their values to rise.</p>
<p>Here’s what the Prime Minister said on Monday: “This government is trying to make housing more available, we’ve tried to make housing more affordable, and the best way to make housing more affordable is to keep interest rates low and stable and that’s exactly what’s happening and trying to make sure the economy is strong.</p>
<p>“As someone who, along with a bank, owns a house in Sydney I do hope that our housing prices are increasing. I do want housing to be affordable, but nevertheless I also want house prices to be modestly increasing."</p>
<p>That’s probably the only time in his reign that Abbott has spoken on behalf of most Australians.</p>
<p>Notwithstanding the misinformation that often describes our housing as the most expensive in the world - and the fuzzy logic that has turned the current up-cycle in Sydney into a national bubble - Australia continues to have one of the world’s highest home ownership rates. Most home-owners with mortgages are ahead on their repayments, while mortgage delinquencies are at record lows. These facts suggest a market that’s healthy and sustainable.<span style="line-height: 1.3em;"> </span></p>
<p>Most of us want property values to rise – and so does the nation. We’re all tasked with the challenge of providing for our retirement years amid a rapidly ageing population and a fragile Budget.<span style="line-height: 1.3em;"> </span></p>
<p>That demands that we invest and grow our assets. For many, the cornerstone of the process is the family home and its value.</p>
<p>So the Prime Minister leads the nation in wanting prices to rise across Australia. The problem is, they’re not.</p>
<p>The latest research figures suggest house values are going backwards in Darwin and Hobart, stagnating in Perth and rising only marginally in Canberra, Brisbane and Adelaide. Sydney, up 16%, has the only boom housing market.</p>
<p>Apartments markets are falling in Perth, Hobart, Canberra and Darwin, and there’s no meaningful growth in Brisbane or Adelaide. Melbourne is up only 3%. Even Sydney’s rise of 8.8% is quite moderate.</p>
<p>There’s nothing in those figures to support the notion of a bubble, nor the bleating of those who claim an affordability crisis, in contradiction of the situation described by the affordability indexes.</p>
<p>It says something about the state of journalism in Australia when the Prime Minister can generate a media storm by commenting that rising property values are a good thing.</p>
<p><em>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></em></p>
<p>Terry is presenting a free webinar with Property Observer editor at large Jonathan Chancellor on Tuesday June 16 at 12.30pm titled on why research is the key to successful property investing in 2015. Sign up here.</p>
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Tony Abbott is absolutely right on house prices: Terry Ryder

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<p><span>Talk in the industry is about whether or not house prices are in a bubble, if so have we been in one for some time and is it expensive bubble or a seriously expensive one?</span></p>
<p><span>One quote I read recently in relation to the current housing market was "One thing seems clear: If we’re having a discussion about whether or not house prices are in a bubble (as we have been for some time now), house prices do not represent good value at the current level. The debate is about whether they are expensive, or seriously expensive."</span></p>
<p><span style="line-height: 1.3em;">Now, of course we're all guilty of making sweeping comments - and myself more than most given my tendency towards a macro focus on this blog - but this snippet gives the full broom treatment to Australia's property markets.</span></p>
<p><span style="line-height: 1.3em;">The last time I checked in at the back end of 2014 there were 9,448,300 dwellings in Australia, a figure that will be approaching 9.5 million or so today. </span><span style="line-height: 1.3em; font-weight: bold;"> </span></p>
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<div><span style="line-height: 1.3em;">Are some of those dwellings expensive? Indeed, and some of them are extraordinarily so in the present and persistent low interest rate climate.</span></div>
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<div>But equally, aren't some house prices very cheap? Very much so - in outer suburban Adelaide and Hobart, for example, and in any number of regional centres - although of course, "cheap" does not been good value ("cheap today is cheap tomorrow" as the old real estate mantra goes).</div>
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<div>The same holds true of share prices and indices, for that matter.<br><br>Are some share indices and stocks trading at high valuations? Yes. In fact, globally some markets are romping ahead to dizzying heights as I looked at only earlier this week.</div>
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<div>That does not mean that some individual stocks don't offer great value, though, particularly for those investors with the requisite skills in fundamental analysis.<br><br>With the benefit of hindsight, although not my favourite sector due to being capital intensive and reliant on the sale of commodities, 1999 was a great time to buy resources stocks. 2009 was an amazing time to load up on bank shares.  Today, health care and materials companies are worthy of consideration.</div>
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<div>Of course, this doesn't mean all companies in a sector are worth buying, or even any of them. There is no "one size fits all."</div>
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<div><strong>Focus</strong></div>
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<div>This was one of a raft of pieces of late referencing popping property bubbles, property speculators, the end of the property boom, shares now being due to outperform property, and so on.</div>
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<div>All fair enough, although the truth is that ex-Sydney (and to a lesser extent Melbourne) there hasn't actually been a property boom to date in this cycle, rather a protracted period of relatively flat prices in real terms, and correspondingly there is no "Australian property bubble".<br><br>Resources influenced Perth and Darwin are seeing declining rents, the polar opposite of frothy conditions, while a number of mining towns have already capitulated. Canberra's property markets seem similarly uninspired.</div>
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<div>Why so much angst from equities-only investors then, one wonders, apart from the wider ramifications for the Australian economy and share markets of a genuine and material property correction?</div>
<br><div>An obvious point from a fundie perspective is that more funds under management equals more fees, so naturally enough does make sense to point out from time to time the benefits of a diversified share portfolio over the risks of holding a specific investment property or portfolio of properties.<br><br>I'm not sure whether it makes a great deal of difference, though. In my experience there exists a fair proportion of investors who are simply "shares people" or "real estate" people, and they won't ever be budged either way!<br><br><strong>Stock valuations decline</strong>
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<div>Perhaps another of the reasons for the angst is that the Australian share markets (generally!) have been on the receiving end of a bit of a shellacking over the past month, which naturally the financial media reports unfailingly on a daily basis.</div>
<br><div>Since threatening to crunch through 6,000 on March 18 the market has tanked, paring all the way back down to 5,600.<br><br>6,000 now seems like a distant dream once again, although the recent dovish Board Minutes from the Reserve Bank reinstated a moderate easing bias, which may help to fire markets up again.</div>
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<div>Now as intelligent people both you and I know that such short term movements don't mean a great deal for stock market investors with a long term mindset.<br><br>In fact, cheaper market prices equates to a greater array of buying opportunities for those with an appropriately disciplined investment approach.</div>
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<div>But it's funny what daily media headlines can do to folk, particularly when Sydney house prices are suddenly once again rising at an annualised pace of somewhere north of 15%. </div>
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<div>The XJO (ASX 200) chart shows that this index has pulled back to the same level as the beginning of March 2007, well over eight years ago.</div>
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<div>While experienced investors are well aware that accumulated returns inclusive of dividends have been robust, a good proportion of Mum and Dad investors tend to like to see capital gains, preferably of the fast buck variety.<br><br><strong>Sydney property leads cycle</strong>
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<div>What seemed to be a highly unlikely outcome for much of the past decade is now once again becoming a reality - Sydney houses selling for double what they did during their last cyclical low around 2005.</div>
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<div>Granted I have only come across a few such examples to date, all of them houses rather than apartments, and usually in popular beachside suburbs such as Bondi, but I expect this will become an increasingly common occurrence over the year ahead.</div>
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<br>Of course, the main advantage that property investors have over share market investors is the use of leverage which can magnify gains...and losses.</div>
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<div>An investment which doubles in value can see the dollars invested increased 10 or 20 fold before transaction and holding costs - for those who get it right and are prepared to hold through the lean periods of the cycle.</div>
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<br>Dare we even mention it, some folk even used 100 per cent leverage in the period leading up the the financial crisis, making the returns on "investment" extraordinarily high.<br><br><strong>Risks to the downside</strong>
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<div>There is an old saying in investment that if something sounds too good to be true then it probably is.<br><br>So, what's the catch? </div>
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<div>One such catch is that most people just aren't very good at investing in property. The stats show that most don't achieve their goals, owning only one or two properties, with many selling within the first early years of ownership.</div>
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<div>It's not always entirely their fault, mind - property advisers have recommended some desperate choices over the last decade, including mining towns and any number of far-flung locations which haven't fared anything like as well as Sydney has. </div>
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<div>It was popular for a while to say that capital city investors were singing the same old tune from years ago and had failed to move with the times, though I haven't heard anyone saying that of late as the Sydney market continues to take off.<br><br>Inner ring Brisbane is now seeing prices rising again too, though not for all property types and suburbs it must be said, and I believe that generic apartments will struggle through this cycle.</div>
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<div><strong>Spruikfest</strong></div>
<br><div>You only had to set foot in the <em>Sydney Homebuyer Show</em> this year to see that the property forum was packed to the rafters with the flocking crowds far outweighing the numbers at the share trading and investing event.</div>
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<div>This is what always happens when house prices are rising, of course.</div>
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<div>Unfortunately so too were the self managed superannuation fund (SMSF) property spruikers out in force, barking orders about setting up trust structures to buy property to anyone who would listen - and anyone who wasn't listening as well, come to think of it.</div>
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<div>The thing to remember is that property and shares are not really directly comparable investments for any number of reasons which I don't have the space or inclination to repeat here.</div>
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<div>Equities are a far "cleaner" and more liquid asset class, very well suited to retirees of the right mindset contrary to popular opinion, particularly given the favourable tax treatment of franked dividend income in Australia.<br><br>No tenants or related headaches. No repairs and maintenance bills, Quick and easy to sell parcels of shares. </div>
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<div>Property investment suits many long term Mum and Dad investors, despite its illiquidity, and the leverage can see them magnify gains (or losses) at a greater rate, provided they invest well (or badly).</div>
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<div>For reasons I never really got my head around some property advisers have recommended investing in towns where there is acres of land around and thus no scarcity. </div>
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<div>The key to long term successful property investment is finding an asset which is in extremely high demand.<br><br>This generally means the larger capital cities, near jobs and where people want and need to live - and is scarce in supply, which ideally means a dwelling with a land value content, and in a land-locked suburban location.<br><br>The long run data shows that even most average capital city property has generally done well through the cycles, beating inflation over time.<br><br>It won't be long before the Sydney median house price has doubled again since 2003, soon thereafter to be threatening the $1 million level.</div>
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<p><em><span>PETE WARGENT </span>is the co-founder of <a href="https://allenwargent.com/" target="_blank">AllenWargent</a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blogger</a>.</em></p>
<p><em>His book '<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>' is out now.</em></p>
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