<p>A collection of just 25 large-format apartments and penthouses overlooking Goodwin Park is entering the Coolangatta market, with <a href="https://www.apartments.com.au/new-apartments/marea-residences-coolangatta-27-27a-dixon-street-coolangatta-qld-4225">Maréa Residences</a> combining a low-density, residential-only approach with uninterrupted park and Pacific Ocean outlooks.</p>

<p>Located at 27 Dixon Street, Maréa comprises three and four-bedroom residences alongside a limited number of dual-level penthouses, with the project positioned between Goodwin Park and <a href="https://www.apartments.com.au/developments/coolangatta-qld-4225">Coolangatta</a>’s coastal precinct.</p>

<p>Construction has commenced, with completion currently estimated for late 2027. Three-bedroom residences are priced from $1.8 million.</p>

<p>[smartcode_project:default project_id=150999 project_image_fid=374005]</p>

<p>The project has been designed around its northern outlook across the park, with the building’s architecture, landscaping and material palette intended to establish a connection with the neighbouring green space. The residences have been configured to maximise natural light and views across Goodwin Park towards the ocean.</p>

<p>Inside, the material palette incorporates timber, stone and brushed brass, complemented by curved detailing and ambient lighting. Kitchens and bathrooms carry the same natural material approach, while residences also include basement parking, storage and lift access.</p>

<p>Maréa’s penthouses are arranged over two levels and include private pools, adding another layer to the project’s focus on larger-format apartment living. Across the development, residences are configured with three or four bedrooms rather than the broader mix of smaller apartment types commonly found in larger projects.</p>

<p>[smartcode_project:default project_id=150999 project_image_fid=374010]</p>

<p>Resident amenity is concentrated at rooftop level, where landscaped entertaining terraces and pools take advantage of elevated views across Coolangatta and the Pacific Ocean.</p>

<p>The project has so far been particularly well received by local owner-occupiers and downsizers, according to Urban Activation Property Sales and Marketing Director Matt George, with the residential-only format, construction quality and northern park outlook among the features resonating with purchasers.</p>

<p>“The uninterrupted northern aspect overlooking Goodwin Park has been a key point of difference, with buyers attracted to the sense of serenity and open space the park provides, while still enjoying easy access to the ocean and being within walking distance of the lifestyle and amenities Coolangatta has to offer,” George said.</p>

<p>[smartcode_project:default project_id=150999 project_image_fid=374002]</p>

<p>“The combination of high-quality construction, a residential-only building, park outlook and proximity to the beach has resonated strongly with the local downsizer market.”</p>

<p>The Dixon Street address is within walking distance of Coolangatta Beach and the broader southern Gold Coast coastline, including the surf breaks at Snapper Rocks and Kirra. Coolangatta’s cafés, restaurants and retail are nearby, while Gold Coast Airport is also within close proximity.</p>

<p>[smartcode_project_cta:default project_id=150999]</p>


Joel Robinson

Maréa Residences brings parkside apartments to Coolangatta

<p data-end="535" data-start="324">Melbourne developer PDG has secured Victorian Government approval for its $1.5 billion Southbank development <a href="https://www.apartments.com.au/new-apartments/the-one-1-queens-bridge-street-southbank-vic-3006">The One</a>, clearing the way for the long-dormant riverfront site opposite Crown to finally be developed.</p>

<p data-end="717" data-start="537">The Minister for Planning has approved the project at 1-29 Queens Bridge Street, with the Department of Transport and Planning issuing the planning permit following its assessment.</p>

<p data-end="918" data-start="719">The approval will allow PDG to develop the prominent 5,059 sqm site with a major mixed-use tower comprising premium apartments, including branded residences, a luxury hotel and boutique office space.</p>

<p data-end="1131" data-start="920">PDG acquired the site in late 2024, with its position directly opposite Crown's main entrance and near Melbourne's Arts Precinct making it one of Southbank's most significant remaining development opportunities.</p>

<p data-end="1131" data-start="920"><img alt="PDG" data-entity-type="file" data-entity-uuid="3933013e-6332-4386-b9be-089df05caf17" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-27%20at%209.29.22%E2%80%AFAM.png?VersionId=sITIgBqDL0N3VNSMwWEmF5UA.uvcsRyu" /></p>

<p data-end="1318" data-start="1133">Designed by COX in collaboration with ODO and PDG, the tower's architecture draws on the movement of the Yarra River, with six vertical pleats running the height of the sculpted facade.</p>

<p data-end="1433" data-start="1320">The project will also see the heritage-listed Queens Bridge Hotel restored and incorporated into the development&nbsp;with new hospitality and public uses, including a rooftop venue.</p>

<p data-end="1658" data-start="1591">A significant component of The One will be its residential amenity.</p>

<p data-end="1864" data-start="1660">More than 5,000 sqm of resident facilities will be delivered across a single level, making it one of the largest consolidated residential amenity offerings proposed in an Australian apartment development.</p>

<p data-end="2011" data-start="1866">The planning approval also incorporates a major upgrade of Queensbridge Square, which PDG will deliver in partnership with the City of Melbourne.</p>

<p data-end="2011" data-start="1866"><img alt="PDG" data-entity-type="file" data-entity-uuid="73167fcd-1031-4b6f-a408-a064cfe45ed1" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-27%20at%209.29.17%E2%80%AFAM.png?VersionId=Pf1AEWxw6SNmBqR0zQW5lyEze.MtxgFp" /></p>

<p data-end="2191" data-start="2013">The existing square will be revitalised as a new civic and pedestrian space along the Yarra River, strengthening the connection between the project, Southbank and the riverfront.</p>

<p data-end="2365" data-start="2193">PDG Founder and Managing Director Vince Giuliano said the approval represented a major milestone for a site which has remained largely underutilised for more than 15 years.</p>

<p data-end="2473" data-start="2367">“This is the most significant Planning Permit approval Melbourne has seen in recent years,” Giuliano said.</p>

<p data-end="2775" data-start="2475">“For more than 15 years, this site has remained underutilised. This approval enables us to deliver a project that will contribute meaningfully to the revitalisation of Southbank, restore and reactivate an important heritage building, and create a new civic and hospitality destination for Melbourne.”</p>

<p data-end="2943" data-start="2777">The latest approval follows an earlier planning permit issued by the City of Melbourne covering demolition works across part of the site at 9-29 Queens Bridge Street. Those demolition and early works are already underway.</p>

<p data-end="3145" data-start="3001">PDG has also started generating early interest in the residential component from owner-occupiers ahead of a planned public launch in early 2027.</p>


PDG secures approval for $1.5bn Southbank apartment development, The One

<p>Local developer Harridan is seeking to turn its Woolloongabba apartment project into the first stage of a broader transformation of Burke Street, using a new 16-storey mixed-use building to establish a greener pedestrian connection toward the rapidly evolving Boggo Road transport and knowledge precinct.</p>

<p>The South East Queensland developer has filed plans for 154 apartments on the <a href="https://www.apartments.com.au/new-apartments/4-burke-street-woolloongabba-qld-4102">southern side of Burke Street</a>, where its proposal has been designed alongside a wider vision by LatStudios for the street.</p>

<p>That vision positions the southern side of Burke Street for buildings of 15 storeys and above, while envisaging lower-rise development of up to five storeys on the northern side to transition into Woolloongabba's existing character housing. It also proposes wider pedestrian verges, deep planting, new street trees and upgrades to the pedestrian approach to Boggo Road Station.</p>

<p>The Harridan development itself has been designed by Brisbane-based Arqus Design and will comprise 154 apartments across 16 storeys. The mix is weighted heavily toward two-bedroom apartments, with 121 proposed alongside 10 one-bedroom and 23 three-bedroom residences. There will typically be around 14 units per floor.</p>

<p>A lower-ground car park and three podium levels will accommodate 156 resident parking spaces, along with visitor and commercial parking. There will also be 154 resident bicycle spaces and 40 visitor bicycle parks.</p>

<p>&nbsp;</p>

<p>Harridan is a family-owned developer and part of the Holmwood Highgate Group, with more than three decades of development activity across South East Queensland. Its portfolio spans residential, commercial and industrial property, with current residential projects including Riverbank on Byron in Bulimba, Esperance Residences in Carina and The Precinct at Kinross Road in Thornlands.</p>

<p>Wooloongabba has been popular for apartment developers, particularly since the announcement of the 2032 Summer Olympics games in Brisbane.</p>

<p>While there have been a lot of development applications, it has failed to materialize into real supply.&nbsp;</p>

<p>Sarazin has been the major player in the area. They are under construction at Murcia Residences, on the fringe of East Brisbane and Woolloongabba. They have just launched <a href="https://www.apartments.com.au/new-apartments/the-stanley-residences-woolloongabba-8-trafalgar-street-woolloongabba-qld-4102">The Stanley Residences</a>, in Woolloongabba on Trafalagar Street. They also have Nuage coming soon on the nearby <a href="https://www.apartments.com.au/new-apartments/nuage-woolloongabba-14-wellington-road-woolloongabba-qld-4102">Wellington Road</a>.</p>


First look: Harridan plans Burke Street transformation beside Boggo Road transport hub

<p><strong>IN BRIEF</strong></p>

<ul>
	<li>
	<p>Just three double-storey Sky Homes sit at the top of The Waterline, each with its own private marina berth and rooftop terrace.</p>
	</li>
	<li>
	<p>Construction on The Waterline is complete, with the first residents expected to move in from mid-October.</p>
	</li>
	<li>
	<p>Sky Homes range from 282 sqm to 367 sqm and are priced from $3.65 million.</p>
	</li>
</ul>

<hr />
<p>Lewis Land has opened the first completed sky home for inspection at Harbour Shores, giving buyers their first opportunity to step inside one of just three double-storey residences crowning The Waterline.</p>

<p>Each sky home comes with its own private marina berth, rooftop terrace and Broadwater views, combining the scale of a larger home with direct access to the boating lifestyle that underpins the wider <a href="https://www.apartments.com.au/new-apartments/harbour-shores-biggera-waters-564-oxley-drive-biggera-waters-qld-4216">Harbour Shores</a> masterplan.</p>

<p>[smartcode_project:default project_id=113271 project_image_fid=366708]</p>

<p>Lewis Land Head of Development Michael Long said the inclusion of a berth with every Sky Home had become increasingly valuable as marina access across the Gold Coast tightened.</p>

<p>“Marina berths are becoming increasingly difficult to secure across the Gold Coast, so including one with every Sky Home makes this a genuinely rare offering,” Long said.</p>

<p>“The private 70-berth marina will accommodate boats up to 12 metres in length and is positioned just 2.5 kilometres from the Broadwater, placing the open ocean only 15 minutes away.</p>

<p>“Being able to step out of your home onto your boat is a rare luxury, and it’s something residents here can look forward to when it opens later this year.”</p>

<p>[smartcode_project:default project_id=113271 project_image_fid=366709]</p>

<p>The display opening comes as construction completes on The Waterline, with the first residents expected to move in from mid-October.</p>

<p>The three Sky Homes range from 282 sqm to 367 sqm and each feature three bedrooms, three bathrooms, multiple living zones, expansive kitchens with butler's pantries and large balconies taking in the Broadwater outlook.</p>

<p>Each residence also has three secure basement car spaces and additional storage.</p>

<p>“This is the first opportunity the Gold Coast has had to step into Harbour Shores and see, touch and feel what we’re bringing to life here,” Long said.</p>

<p>“There are only three Sky Homes within The Waterline, ranging in size from 282sqm to 367sqm, with each residence featuring three large bedrooms, three bathrooms, multiple living zones, expansive custom-built kitchens with butler’s pantry, and large balconies capturing Broadwater views.”</p>

<p><img alt="Harbour Shores" data-entity-type="file" data-entity-uuid="bab65e10-4fab-45e1-92d8-fc56e2ab98ff" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-25%20at%202.00.16%E2%80%AFPM.png?VersionId=XT8q76LsPkw3cYTsvN3JfFDaPLud90PN" /></p>

<p>Residents of The Waterline will have access to a private pool, along with Harbour Shores' wider collection of amenity including a lagoon pool, social clubhouse, tennis court, gym, yoga facilities and sauna.</p>

<p>Lewis Land partnered with Studio Collective to furnish the completed display, with the interiors designed to demonstrate how the residences could function as permanent homes rather than simply as show apartments.</p>

<p>Studio Collective Director Melissa Park said the surrounding waterways informed the interiors, but in a more restrained way than a traditional coastal scheme.</p>

<p>“We drew inspiration from the canals and coastal surrounds, but our approach was to interpret that subtly through layered materials and a grounded palette of earthy tones, rather than literal coastal references,” Park said.</p>

<p>“We introduced hero moments of green and teal to reference the surrounding waterways, while mirrored elements help reflect natural light.</p>

<p>“The result is a residence that feels elevated yet comfortable, somewhere buyers can genuinely imagine themselves living, entertaining and unwinding.”</p>

<p>Sky Homes are priced from $3.65 million.</p>

<p>Lewis Land is also offering private marina berths with The Residences, its limited collection of three and four-bedroom villas positioned directly along the Harbour Shores waterfront boardwalk.</p>

<p>Three-bedroom villas are priced from $2.99 million, while four-bedroom residences start from $3.19 million.</p>

<p>Harbour Shores is being marketed by Colliers International.</p>

<p data-end="555" data-start="341">[smartcode_project_cta:default project_id=113271]</p>


Lewis Land opens sky home display as The Waterline completes at Harbour Shores

<p data-end="387" data-start="97">St Vincent de Paul Society Housing Australia has filed plans for a major mixed-use housing precinct on the southern edge of the North Sydney CBD, adding another significant proposal to a pocket around North Sydn​ey Station that is quickly becoming one of the LGA's busiest development zones.</p>

<p data-end="697" data-start="389">The State Significant Development Application covers a 5,990 sqm site at <a href="https://www.apartments.com.au/new-apartments/1-19-mackenzie-street-lavender-bay-nsw-2060">1-19 MacKenzie Street and 211 Blues Point Road in Lavender Bay</a>, immediately south of Nor​th Sydney Station and between the commercial core and the lower-rise Lavender Bay Heritage Conservation Area.</p>

<p data-end="925" data-start="699">Designed by Wardle, the proposal would deliver a new residential tower comprising 88 build-to-sell apartments and 19 affordable apartments, alongside a separate co-living building with 57 rooms and a building manager's studio.</p>

<p data-end="1217" data-start="927">It would also see the significant restoration and upgrade of St Francis Xavier Catholic Church, the adaptive reuse of the former school building, new parish facilities, retail, a new public square and around 1,000 sqm of publicly accessible open space.</p>

<p data-end="1217" data-start="927"><img alt="Vinnies North Sydney" data-entity-type="file" data-entity-uuid="d5dd7f87-a617-463e-b577-17541e01f0e9" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-26%20at%209.10.13%E2%80%AFAM.png?VersionId=4R8TsFN3P_LrrXO2HswTOIrx2blil8lh" /></p>

<p data-end="1538" data-start="1219">The project is seeking a concurrent rezoning of the site to R4 High Density Residential and an increase in the maximum building height to allow a tower reaching RL120, or up to 20 storeys. The proposal was progressed through the NSW Government's Housing Delivery Authority pathway.</p>

<p data-end="1723" data-start="1540">The build-to-sell component will be weighted toward larger apartments, with just six one-bedroom apartments compared with 31 two-beds, 43 three-beds and eight four-bedroom residences.</p>

<p data-end="2063" data-start="1725">The 19 affordable apartments will comprise two studios, 15 one-bedroom apartments and two two-bedroom apartments, taking the total apartment component to 107 residences before the 58 co-living rooms are included.</p>

<p data-end="2063" data-start="1725"><img alt="Vnnies" data-entity-type="file" data-entity-uuid="7d568ca5-cb90-4e18-96c6-d9795dba0c56" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-26%20at%209.10.05%E2%80%AFAM.png?VersionId=GY2R5M9VtQh0EKy1vajaea19PSLOPuRD" /></p>

<p data-end="2205" data-start="2065">Wardle's design for the Vinnies site has sought to negotiate that emerging high-rise context while retaining the lower-scale character of MacKenzie Street and the adjoining heritage conservation area.</p>

<p data-end="4244" data-start="4087">The main building adopts a three-storey podium and tower arrangement, with the podium aligned to the ridgeline and front setback of St Francis Xavier Church.&nbsp;Wardle has designed the podium with colonnades, seating, recessed entries and active ground-floor frontages, with sandstone-toned precast concrete and face brick referencing the materiality of the existing church.</p>

<p data-end="4598" data-start="4246">The tower then steps back eight metres to the south and six metres to the north before rising in a sculpted form comprising four interlocking quadrants. Wardle has also introduced rounded forms and chamfered corners to reduce the tower's perceived bulk and improve view sharing with neighbouring development sites.</p>

<p data-end="4798" data-start="4600">Resident facilities and outdoor areas are planned at the separation between the podium and tower at Level 3, oriented toward Sydney Harbour and the CBD skyline.</p>

<p data-end="4798" data-start="4600">The tower itself will feature a glass reinforced concrete facade, with recessed balconies and deep reveals used both to provide shading and privacy and frame views toward the harbour and city. The lower levels take a different architectural approach, using brick and sandstone-toned finishes intended to establish a stronger relationship with St Francis Xavier Church. The Church itself will be conserved and upgraded for its continued use, while the former school building will be adaptively reused as part of the co-living component.</p>

<p data-end="5032" data-start="4800"><img alt="Lavendar Bay" data-entity-type="file" data-entity-uuid="2d4418ad-90aa-4d49-af93-c80b140aea80" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-26%20at%209.09.47%E2%80%AFAM.png?VersionId=Kv4gzbsACaGvZSRuaqcfGC54jEJRXIDJ" /></p>

<p data-end="5486" data-start="5211">&nbsp;</p>

<p data-end="2205" data-start="2065">The proposal adds to an increasingly concentrated pipeline of residential development around Blue Street, MacKenzie Street and Lavender Bay.</p>

<p data-end="2375" data-start="2207">Just west of the site, Central Element lodged plans earlier this year for one of the most significant residential developments proposed in Lavender Bay in recent years.</p>

<p data-end="2712" data-start="2377">Central Element's SJB-designed scheme at 64-66 Lavender Street and 3-7 Middlemiss Street would deliver 163 apartments across two towers rising 23 and 32 storeys, replacing five existing apartment buildings containing 32 homes. The project also forms part of the Housing Delivery Authority pathway.</p>

<p data-end="2751" data-start="2714"><em><a href="https://www.apartments.com.au/news/nsw/first-look-central-element-reveals-lavender-bay-apartment-plans?utm_source=chatgpt.com" rel="noopener" target="_blank">First look: Central Element reveals Lavender Bay apartment plans</a></em></p>

<p data-end="2865" data-start="2753">Immediately around North Sy​dney Station, another two significant proposals have emerged at 5 and 15 Blue Street.</p>

<p data-end="3067" data-start="2867">Zurich Australian Insurance Properties is seeking to adaptively reuse its longstanding commercial building at 5 Blue Street, directly above North Sydney Station, rather than demolishing the structure.</p>

<p data-end="3379" data-start="3069">Its SSDA proposes converting the building into a 14-storey mixed-use development with 62 apartments and 86 co-living rooms, together with ground-floor retail and a major refurbishment of Blue Street Plaza. The application is currently at the Response to Submissions stage.</p>

<p data-end="3379" data-start="3069"><a href="https://www.apartments.com.au/news/nsw/first-look-zurich-targets-north-sydney-office-conversion-with-148-unit-proposal-above-metro-station"><em>First look: Zurich targets North Sydney office conversion with 148-unit proposal above Metro station</em></a></p>

<p data-end="3883" data-start="3659">&nbsp;</p>


First look: Vinnies files for 20-storey Lavender Bay apartment tower as North Sydney housing pocket heats up

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

<html><body>
<p><span>GUEST OBSERVATION</span></p>
<p> </p>
<div class="grid-twelve grid-last content-wrapper">
<div class="grid-twelve instapaper_body">
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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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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>
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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>
<div> </div>
<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>
<div> </div>
<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>
<div> </div>
<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>
<div> </div>
<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><img src="/images/2015/05/22/ASX.jpg" alt=""></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>
<div>
<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>
<div>
<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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<div><img src="/images/2015/05/22/Property.jpg" alt=""></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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