Perth’s new apartment market recorded its strongest quarter of sales since Q4 2021, with 412 apartments sold in Q1 2026 and a record quarterly sold value of $537 million, according to Urbis’ latest Apartment Essentials results.

Urbis said the March quarter result reflects strong, highly product‑specific demand across both ends of the market, from more attainable projects delivering at scale, through to premium stock being absorbed by equity‑rich downsizers.&nbsp;

David Cresp, Partner at Urbis, said the key story in Perth is not demand, it is the market’s ability to convert demand into delivered housing.&nbsp;

“This is the strongest sales quarter since Q4 2021, and it reinforces that demand in Perth is real and it’s local,” David Cresp said. “But the task now is delivery, turning that demand into projects that can actually be built and completed.”&nbsp;

[smartcode_project:default project_id=110291 project_image_fid=302785]

<h2>Affordable product leads, premium demand remains resilient</h2>

Sales in Q1 were led by more affordable projects, with The Boulevard (SKS Group) recording 115 sales in the quarter, the presentation noting this is only the second time a single project has surpassed 100 quarterly sales. The project was able to offer more affordable housing product right next to a train station.&nbsp;

Palmyra West (Finbar) also delivered strong results with 28 sales in Q1, following 84 sales in Q4, with an average price of under $800,000, underscoring depth of demand for well‑located, attainable new stock.&nbsp;

At the premium end, Urbis said downsizer demand is continuing, with the results highlighting Romeo (Applecross, Finbar) recording 75 sales and reaching almost 50% sold in one quarter.

Jual (Shenton Park, Celsius Property) also posted a strong quarter with 28 sales, reaching 39% sold in one quarter.

Urbis noted that Perth apartment demand is not speculative, not investor‑led, and not uniform, describing it as localised, often equity‑driven and highly product‑specific, a pattern reflected in the polarisation between strong “attainable” performers and premium downsizer product.&nbsp;

[smartcode_project:default project_id=148957 project_image_fid=364102]

<h2>Prices underpinned by costs, and the delivery risk is growing</h2>

Urbis said pricing pressure is cost not demand‑driven: construction costs and delivery risk are now a central constraint, with the results noting build costs remain elevated and volatile, and that energy, fuel and labour uncertainty weigh on feasibility.

David Cresp said a growing challenge for private Build‑to‑Sell developers is simply securing a builder in the current environment.

“Developers are really feeling the pressure from a building market that was operating at capacity and securing a builder is challenging,” David Cresp said, adding that even where a builder can be secured, “trying to get to the price that makes the development financially viable is incredibly challenging in the current market.”&nbsp;

Urbis’ broader WA commentary also notes that industry remains at or above capacity with lot and housing creation, and that many builders are limiting new sales to manage stretched workforces and fixed‑price contract pressures, conditions that flow directly into apartment feasibility and delivery timing.

[smartcode_project:default project_id=108869 project_image_fid=317905]

<h2>Supply: improving later, but still constrained, and Perth lags eastern benchmarks</h2>

While near‑term supply remains constrained, Urbis’ forecast shows completions lifting “Supply is forecast to be back above 1,500 apartments per annum for the first time since 2019”, with 1,775 completions forecast for 2026, and volumes remaining above that level over the following years.&nbsp;

Looking further ahead, completions are forecast to reach 2,500 in 2028, with the report noting 32% of that total is social/affordable, reflecting the role of government‑supported delivery in rebuilding the pipeline.&nbsp;

However, Urbis said Perth remains behind comparable markets on pipeline scale. In a national comparison of projects under construction, the report shows under construction Perth Build‑to‑Sell (BTS) at 3,446 apartments versus the Gold Coast at 7,922. Mr Cresp said “The challenge for Perth is how to we grow the delivery pipeline”.

Urbis’ conclusion is that Perth’s market is increasingly defined by product discipline and delivery certainty, with the research identifying “delivery certainty is key” and calling out builder risk and procurement models as core success factors, alongside “timing and staging”.&nbsp;

Joel Robinson

Perth apartment sales hit strongest pace since late 2021 as builder capacity tightens

<a href="https://www.apartments.com.au/developers/sammut-developments">Sammut Group</a> has secured development approval for its latest Brisbane apartment project, marking the Sydney developer’s next step in expanding its Queensland pipeline following the success of its debut Gold Coast development, Coast.

The approved project at <a href="https://www.apartments.com.au/new-apartments/44-glen-road-toowong-qld-4066">44 Glen Road, </a><a href="https://www.apartments.com.au/developments/toowong-qld-4066">Toowong</a> will deliver a 15-storey riverfront apartment building with 42 residences, significantly increasing the scale of the site’s previous approval for a smaller luxury scheme. Designed by Bureau^proberts, the development will comprise a mix of predominantly four-bedroom and two-bedroom apartments positioned to maximise Brisbane River and city views.

Sammut Director Julian Sammut said the group had been actively searching Brisbane for several years before identifying Toowong as the right fit.

“Brisbane was the right step for Sammut,” Sammut said.

“With the success of Coast we thought we should definitely look to do more in Queensland alone. We then pushed up to look at Brisbane. We've been looking for I'd say two to three years actually and it was hard to find the right location.”

<img alt="Sammut makes Brisbane apartment play" data-entity-type="" data-entity-uuid="" src="https://res.cloudinary.com/dz9xllyip/image/fetch/f_auto,c_limit,w_1440,q_75/https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/field/image/Screenshot%202025-12-23%20at%203.27.14%E2%80%AFPM.png?VersionId=dYAVIL7qdcGA8ojvkslSrLjczXFejSSx" />

Sammut said suburbs including New Farm and Teneriffe were considered before the group ultimately focused on Toowong due to its strong downsizer demographic and limited supply of developable riverfront land.

The site was acquired off-market after what Sammut described as a lengthy negotiation and planning process, with the developer pursuing an uplift to the original approval.

“We are DA approved now which is very exciting,” Sammut said.

“We've had our change approval come through and we've obviously doubled the height, 15 storeys plus rooftop. We've got 42 amazing apartments that are going to be coming to market soon.”

<img alt="Sammut makes Brisbane apartment play" data-entity-type="" data-entity-uuid="" src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,dpr_2.0,q_auto:good/https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202025-12-23%20at%203.27.26%E2%80%AFPM.png?VersionId=ohkRkY0dIZlqdfME2EZePsCQavRiBadE" />

Bureau^proberts said the design responds to Toowong’s evolving urban character, balancing contemporary apartment living with the area’s established residential identity.

“A place where traditional Queensland living has taken place for centuries; Toowong is seeing a shift of contemporary influence, commercial and retail hubs mixed with well-considered residential offerings – all the while maintaining its character and charm,” the architect noted in planning documents submitted to Brisbane City Council.

The architecture practice said the project’s form was shaped by its riverfront setting, flood considerations, neighbouring building scales, and view corridors.

“They said the mix of four and two-bedroom apartments capture the ‘fundamental qualities of Queenslander living,’ translated into the context of a contemporary subtropical building.”

The development sits just off Coronation Drive within walking distance of Toowong’s retail precinct and the upgraded Regatta ferry terminal, while also benefiting from proximity to the incoming green bridge connection to West End. Sammut said the accessibility and amenity offering were central to the site’s appeal.

The approval adds to growing residential activity along the Toowong riverfront, joining nearby projects including Consolidated Properties’ Monarch Residences and Spyre Group’s ARC Residences.

Sammut secures approval for debut Brisbane apartment development in Toowong

Developer Lanevick is heading back into Sydney’s apartment market after focusing more heavily on the luxury townhouse and terrace sector in recent years.

Lanevick, founded and directed by Steve Maroun, is expecting to receive approval in the coming months for a new apartment development in Gladesville, with the aim to launch it to the market later this year.

The 51-apartment project, designed by Studio Johnston, will comprise a mix of one-, two-, and three-bedroom apartments positioned toward the Hunters Hill downsizer market.

“Traditionally it’s been difficult for people in that market to downsize because there just hasn’t been the right product available,” Maroun said.

“We’re targeting buyers who might have 30 to 40 per cent of their house value sitting in the bank after downsizing.

“They still want good spacious entertaining areas, they still want quality design, but they also want flexibility and the ability to enjoy life a bit more after working hard for a long time.”

The project sits near Boronia Park and within close proximity to the Parramatta River foreshore, an area Maroun says offers more of a Hunters Hill lifestyle than a traditional apartment precinct.

“From a lifestyle perspective, it’s really more Hunters Hill than Gladesville,” Maroun said. “You’re close to the foreshore, close to parklands, and still connected back into the village precinct.”

From level four and above, apartments will capture water views&nbsp;toward Sydney Harbour. Communal amenity will include rooftop entertaining areas, wellness spaces, and a gym tailored toward owner-occupier buyers.

“We’ve really designed these apartments around that buyer coming from the Hunters Hill LGA and what they’re actually looking for in their next chapter.”

The proposed development has also been designed to respond to the changing character of the broader Gladesville town centre, where a growing number of mixed-use and residential proposals are expected to emerge over the coming years.

“Gladesville presented a rare opportunity to deliver a genuinely design-led residential project within an evolving lifestyle precinct, just moments from the growing Gladesville town centre, and we’ve approached the project with a strong focus on architecture, liveability and long-term community value,” Maroun said.

Maroun said Lanevick saw a first-mover advantage within the precinct as planning controls continue to evolve to accommodate greater housing density.

“We think there’s a real opportunity there that hasn’t really been serviced properly yet,” he said.

“There’s going to be a broader evolution of the whole Gladesville village precinct over time, particularly with more activation and mixed-use outcomes.”

The Venus Street proposal will include a commercial and retail component at ground level designed to contribute to that evolving streetscape activation.

“A big part of the thinking was how do you activate that area properly and create more vibrancy and amenity, which is what Hunters Hill has been looking for,” Maroun said.

Lanevick’s focus since 2020 has largely been on smaller-scale luxury townhouse and terrace developments. The developer recently completed Royale Randwick, also designed by Studio Johnston, where prices reached $3.65 million. The project was featured in the UDIA NSW 2026 Professional Development Prospectus and was also named a finalist for Development of the Year.

&nbsp;

Lanevick to cater for Hunters Hill downsizers with new Gladesville apartment development

Property developer One Living, backed by former Macquarie banker turned investment manager Chris Green’s investment firm, has unveiled plans to bring more institutional capital into housing to help address the national supply crisis.

The New York-based investor has focused his firm, GreenPoint Partners, on addressing the supply shortage hitting middle market housing in Australia.

It is backing the new One Living business to develop more than 1000 units along the eastern seaboard. The new firm is starting with a development on Mona Vale Road, on the border of Mona Vale and Pymble, in Sydney’s Northern Beaches, with around 140 apartments planned. They are eyeing off more sites across the city.

With cost pressures rising in the industry, One Living’s model is to be a vertically integrated developer-builder, so it can respond directly to the housing gap by removing the cost inefficiencies embedded in traditional residential delivery.

“We are building a platform designed to operate at scale and starting in a market where there’s a clear need for quality, attainable housing,” One Living joint managing director Joseph Scuderi said.

“It’s that missing middle – it’s that attainable end of housing… that’s what most Australians invest into and what Australians can actually afford.”

<img alt="Mona Vale" data-entity-type="file" data-entity-uuid="798dfa93-4941-4db6-a696-31e9dc18e81c" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%202.31.50%E2%80%AFPM.png?VersionId=mKBqi5C_DmeiXS.AtJkcR8LQIxqCqmFi" />

GreenPoint Partners brings years of experience assembling and scaling real estate operating businesses across major markets. And Green sees a big opportunity in Australia.

“For its size, sophistication and importance to the community, Australia’s living sector has remained largely under-institutionalised, which represents significant opportunity,” Green said. “GreenPoint identified that gap, assembled the right team, and is backing One Living to build a platform that is aligned to market needs.”

Green said being a builder-developer would give the company the capacity and flexibility it required to deliver reasonably-priced homes.

“We want it to be at that attainable level; not super high end luxury but at that attainable level,” he said.

<img alt="Mona Vale" data-entity-type="file" data-entity-uuid="74a5344a-4b26-4d4a-ada3-056b1220be77" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%202.32.15%E2%80%AFPM.png?VersionId=vY8hXHO4reBMdO8ZXMWCNtGZJofUPQ3j" />

&nbsp;

One Living will undertake a component of affordable housing in its schemes, which it will own and operate, and it could also run build-to-rent on some sites.

Green praised local policy settings.

“The NSW government is being very supportive, strategic and pragmatic in terms of how do we generate more supply of housing,” he said. “We think it’s actually positive for development and the bit that’s been lacking at that attainable level is that it’s lots of relatively small private developers, whereas we want to create an institutional platform.”

One Living is also&nbsp;looking at high-density projects and could take on more institutional funding in the future.

“The way we will be able to achieve economies of scale is through size,” Green added.

One Living enters Sydney's new apartment market with Northern Beaches site acquisition

It's been several years since there's been an opportunity to buy a brand new townhome in Melbourne's coastal suburb of Mordialloc. Even apartment developments in recent times have been few and far between in the area.

Local developer LDS Property identified the gap in new housing, securing a site on White Street, directly opposite&nbsp;Woodlands Golf Club Mordialloc. They've recently launched&nbsp;<a href="https://www.apartments.com.au/new-townhouses/wm-residences-mordialloc-102-white-street-mordialloc-vic-3195">WM Residences</a>, just 13 townhouses which they have already started building.

Projects by Buxton Director Heath Thompson, who is selling WM Residences, says the townhouses x that perfect middle ground be

"Mordialloc residents have had limited options to downsize within the suburb, often forcing them to look elsewhere despite long-standing ties to the area," Thompson says.

"With very little comparable new supply coming to market, projects like WM Residences are well placed, particularly as buyers look to capitalise on current conditions amid constrained supply."

[smartcode_project:default project_id=134646 project_image_fid=6109]

The development, designed by regarded architecture firm&nbsp;<a href="https://www.apartments.com.au/architects/ewert-leaf">Ewert Leaf</a>,&nbsp;adopts a deliberately restrained architectural approach, focusing on simplicity, durability and liveability rather than overt design gestures.

The boutique scale is central to the offering. With only 13 three-bedroom residences, each home is configured to prioritise functional layouts and everyday use, supported by private terraces and secure two-car garages.

Ewert Leaf’s design response leans into a calm, neutral material palette. Interiors are defined by oak flooring, white walls and soft finishes, creating a consistent and understated backdrop. The approach avoids trend-driven detailing in favour of longevity, with an emphasis on natural light and spatial clarity.

[smartcode_project:default project_id=134646 project_image_fid=6110]

Beyond aesthetics, the homes are designed to meet contemporary performance expectations. Each residence targets a minimum 6-star energy rating, incorporating double glazing, comprehensive insulation and all-electric Bosch appliances.

The project’s location supports a walkable coastal lifestyle, sitting within close proximity to Mordialloc’s foreshore, Main Street retail strip and the train station. Local cafés and dining venues, including Suburbia Deli and Hendriks Café, are within a short walk, reinforcing the area’s established neighbourhood character.

[smartcode_project:default project_id=134646 project_image_fid=6116]

While <a href="https://www.apartments.com.au/developments/mordialloc-vic-3195">Mordialloc</a> is often defined by its beach and pier, the project taps into other areas of day to day living, offering easy access to local food, casual dining and transport, rather than positioning itself purely as a lifestyle retreat.

WM Residences reflects a continued trend across Melbourne’s coastal suburbs towards smaller-scale, design-led townhouse developments, particularly on infill sites where proximity to amenity is already established.

With construction commenced prior to its market entry, the project aligns with a growing preference among buyers for developments with visible progress and defined delivery timeframes.

[smartcode_project_cta:default project_id=134646]

WM Residences fills gap in Mordialloc townhouse market

<html><body><div class="page" title="Page 1">
<div class="layoutArea">
<div class="column">NAB have suggested the orderly correction in house prices will continue over the next 18 to 24 months, with Sydney units falling around 10 percent and Melbourne houses over eight percent.</div>
<div class="column"> </div>
<div class="column">NAB’s change in forecast comes after their current market sentiment survey dipped to a seven year low and confidence collapsed.</div>
<div class="column"> </div>
<div class="column">Confidence in the NAB Residential Property Index in July saw confidence fall to its lowest level since mid-2016.</div>
<div class="column"> </div>
<div class="column">Its recent release is its first negative read since mid 2012, when the property price boom began.</div>
<div class="column"> </div>
<div class="column">"Weakening house prices in New South Wales and Victoria weight heavily on the market," NAB's chief economist Alan Oster said.</div>
<div class="column"> </div>
<div class="column">In July NAB forecasted a fall of 3.7 percent in the Sydney housing market this year. Now they suggest it will be a 5.7 percent decline.</div>
<div class="column"> </div>
<div class="column">Click here <a href="https://www.propertyobserver.com.au/images/2018/10/10/NAB%20House.jpg" target="_blank">to enlarge.</a>
</div>
<div class="column"> </div>
<div class="column"><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2018/10/10/NAB%20House.jpg" alt=""></div>
<div class="column"> </div>
<div class="column">Melbourne's housing market has seen the biggest forecast change. Predicted to drop 2.3 percent over the year in July, they are now forecast to decline by 5.9 percent, even greater than Sydney.</div>
<div class="column"> </div>
<div class="column">Unit prices in Sydney have now been tipped to decline twice as much as they were forecast to in July.</div>
<div class="column"> </div>
<div class="column">NAB predicted a 1.6 percent decline, which they have changed to a 3.6 percent drop.</div>
<div class="column"> </div>
<div class="column">Click here <a href="https://www.propertyobserver.com.au/images/2018/10/10/NAB%20units.jpg" target="_blank">to enlarge.</a>
</div>
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<div class="column"><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2018/10/10/NAB%20units.jpg" alt=""></div>
<div class="column"> </div>
<div class="column">Oster says the dwelling declines are a healthy correction.</div>
<div class="column">
"Overall, we see this as a healthy correction which will help offset some of the risk in the household sector against a backdrop of a relatively healthy economy and labour market," he said.
"Our central scenario does not include a credit crunch event leading to disorderly falls in house prices."
</div>
</div>
</div></body></html>

jrobinson-rf4aSBido9

NAB change property price correction forecast after confidence collapses

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An ongoing ASIC investigation has resulted in the permanent banning of former National Australia Bank (NAB) branch manager Mathew Alwan from engaging in credit activities and providing financial services.
The ban is the result of an extensive ASIC investigation in respect of NAB employees in greater western Sydney who were accepting false documents in support of loan applications and falsely attributing loans as having been referred by NAB introducers in order to obtain commissions. This conduct was the subject of the first case study before the Financial Services Royal Commission.
Mr Alwan’s banning follows the permanent banning of former NAB employees Danny Merheb and Samar Merjan (also known as Samar Awad) from engaging in credit activities and providing financial services, and the <a href="https://propertyobserver.com.au/finding/residential-investment/property-management/2-uncategorised/87011-reckless-loan-fraud-prompts-asic-ban-on-former-nab-branch-manager" target="_blank">seven year banning</a> of former NAB branch manager Rabih Awad.
From 2012 to 2015, Mr Alwan assigned 101 home loans as being referred to NAB by an introducer, causing a total of $186,725 to be paid to the introducer by way of commission.  ASIC found in 25 of these loan applications, Mr Alwan had knowingly given NAB false or misleading information and documentation.   
The introducer in question is Mr Alwan’s relative, a fact he did not disclose to NAB and actively concealed from the bank when questioned.
ASIC found that Mr Alwan’s conduct was dishonest, deliberate and repeated.
ASIC also found Mr Alwan personally lent money to a NAB staff member who reported to him and to a NAB customer while loan applications by each of them were pending approval, creating an unacceptable conflict of interest.
Mr Alwan has the right to lodge an application for review of ASIC’s decisions with the Administrative Appeals Tribunal.
ASIC’s ongoing investigation is considering whether a brief for criminal charges should be referred to the CDPP.
<h2>Background</h2>
On 16 November 2017, NAB announced a remediation program for home loan customers whose loans may not have been established in accordance with NAB’s policies.
NAB has identified that around 2,300 home loans since 2013 may have been submitted with inaccurate customer information and/or documentation, or incorrect information in relation to NAB’s Introducer Program.
 
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ASIC permanently ban another former NAB branch manager for accepting false loan documents

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National Australia Bank are electing not to hike their home loan rates and follow the other three of the big four banks.
Westpac raised their variable rates by 14 basis points late last month, <a href="/expert-insights/finance/westpac-is-the-first-of-the-big-four-banks-to-hike-out-of-cycle">the first to hike out of cycle.</a>
Last week <a href="/expert-insights/finance/cba-and-anz-hike-variable-home-loan-rates">ANZ raised their rates by 16 points</a> and were closely followed by Commonwealth Bank, the nation's largest lender, who hiked just 20 minutes later by 15 points.
NAB boss Andrew Thorburn said they need to rebuild the trust of their customers.
"By holding our NAB Standard Variable Rate longer, we help our customers for longer," Thorburn said in his statement.
“By focusing more on our customers, we build trust and advocacy, and this creates a more sustainable business.”
Thorburn said NAB will continue to regularly review its rates and assess whether current market conditions, including funding costs, continue.
Click here <a href="https://www.propertyobserver.com.au/images/2018/9/10/big%204%20rates.jpg" target="_blank">to enlarge.</a>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2018/9/10/big%204%20rates.jpg" alt=""> Source: RateCity.com.au
NAB's standard variable rate (SVR) for home loans sits at 5.24 percent.
RateCity.com.au research director Sally Tindall said NAB's announcement was 'exactly what home owners need.'
"NAB has heard the complaints from the government, regularors and most importantly their customers, and has acted," she said.
"It's great to see a bank putting its customers ahead of its profit margins."
New Prime Minister Scott Morrison has taken to Twitter to praise NAB.
"Good call by NAB not to life mortgage rates," he tweeted.
"They seem to get it."
The executive director of the Finance Brokers Association of Australia (FBAA) Peter White said the decision by NAB to stand out from the crowd was "a great step and shows strong support for its 900,000 plus customers."
“I predicted all the majors would follow Westpac when it raised its variable home loan rate less than two weeks ago.
"I am pleased my prediction was wrong.
"Thank you to NAB for bucking the trend."
The decisions by the ANZ and CBA to follow Westpac were as "predictable as they were unnecessary, and their existing customers should be complaining loudly and demanding better," Mr White said.
 
 
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NAB to hold home loan rates despite rival big four hikes

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The NAB Commercial Property Index fell 4 points to +17 in Q2 but remains 14 points above its long-term average of +3.
State indices declined across the country, except in VIC.
Sector indices for CBD hotels, office and industrial property converged in Q2, but remain much lower for retail.
<img src="https://www.urban.com.au/images/2018/7/25/NAB%20CProp%202.JPG" alt="">
CBD hotels eased despite solid occupancy and a favourable tourism outlook.
Office and industrial indices also fell - even with positive lead indicators in office and online and warehousing demand for industrial.
Retail better (but negative) as subdued retail business conditions and slow wages growth hurt consumer sentiment.
<img src="https://www.urban.com.au/images/2018/7/25/NAB%20CProp%204.JPG" alt="">
Confidence was largely unchanged in VIC and QLD, but slightly weaker in NSW.
SA/NT was the least confident by some margin (and in all sectors), with WA also trailing.
<img src="https://www.urban.com.au/images/2018/7/25/NAB%20CProp%203.JPG" alt="">
Confidence fell most in CBD hotels (from high levels) but is still highest overall.
Industrial also lower and now on par with office after out-performing in Q1.
Office changed very little, with sector benefiting from demand in key states and nascent signs of recovery in under performing states.
Retail improved a little, but is still negative and weakest of all sectors. 
Expectations for capital growth in the next one to two years are strongest for office property at 1.6% &amp; 1.7% (replacing CBD Hotels), with VIC &amp; NSW leading the way.
<img src="https://www.urban.com.au/images/2018/7/25/NAB%20CProp%205.JPG" alt="">
They are weakest for retail (-0.8% &amp; -0.7%), with values tipped to fall or stay flat in all states. 
National office vacancy fell to 8.5% in Q2 (9.0% in Q1) - lowest since Q4’15. Despite small increases in VIC and NSW, they remain the tightest markets for space.
Vacancy also fell further in QLD (lowest level in 4 years) and looks to have stabilised in SA/NT and WA. 
<img src="https://www.urban.com.au/images/2018/7/25/NAB%20CProp%201.JPG" alt="">
Office property also expected to lead way for rental growth in the next-12 years (1.5% &amp; 2.0), followed by industrial (1.2% &amp; 2.1%), with NSW and VIC out-performing in both markets.
In retail, the outlook is for rents to continue falling.
This quarter NAB asked property professionals for their take on the RBA and around two in three property professionals think next RBA move on rates will be up.
Only 4% see a cut and 23% no change while most (53%) believe next move will occur in six-12 months (NAB’s view (up) also sits in six-12 month range but at latter end).
If rates continue rising in medium to longterm, 18% think it will cause property values to fall over 10% and 51% less than 10%. 
Less than one in 10 (9%) property professionals use interest rate hedging to mitigate risk and almost six in 10 (59%) said they did not hedge and did not expect to do so in the future. 
When asked how their view on rates was impacting their hedging decision, 44% said they did not intend to change their position.
But 36% planned to increase the amount of hedging and 11% would increase the length of interest rate hedging. 
Despite a cooling housing market, a survey high 65% of developers starting new projects are still targeting residential development. 
The recent improvement in accessing funds has reversed in Q2.
In net terms, -29% said it was harder to obtain loans (-21% in Q1) and -16% equity (-14% in Q1).
More property professionals now also expect funding conditions to worsen in next six-12 months.
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j.ballantyne1990-6AQqhLzZaK

NAB quarterly commercial property survey shows confidence still strong but declining

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The Sydney house market is forecast to fall 3.7 percent this year, according to the latest NAB Residential Property Index which saw confidence fall to its lowest level since mid-2016 and less than half the average.
The 1.6 percent fall in unit prices in Sydney in 2018 will not be as much as for houses. 
NAB's Residential Property Index is 'a measure of sentiment among property professionals based on expectations for house prices and rents'.
Sentiment waned in all states, with the biggest falls in WA and NSW.
The report suggests weaker than expected residential markets in Melbourne, Brisbane and Perth would add to ongoing weakness in Sydney.
It had prompted NAB to cut its outlook for housing prices this year to expect house prices this year to fall 1.8 percent from the 0.8 percent it forecast in April.
Unit prices are tipped to fall 1.7 percent.
<img src="https://www.urban.com.au/images/2018/7/12/NAB%20res%20G2.JPG" alt="">
<img src="https://www.urban.com.au/images/2018/7/12/NAB%20res%20G4.JPG" alt="">
Confidence also fell to a new survey low, pulled down mainly by NSW and VIC where the outlook for house prices has been scaled back sharply.
The outlook for rents remains positive in all states and is likely placing upward pressure on yields.
It noted housing demand from first home buyers continued to offset a reduction in demand from foreign buyers in new and established housing markets, with state government incentives and moderating house prices assisting these buyers in moving onto the property ladder.
Property professionals have said credit constraints are impacting housing markets more than they have for a number of years amid intensified lending scrutiny by banks and APRA-inspired tighter credit policies.
<img src="https://www.urban.com.au/images/2018/7/12/NAB%20res%20G3.JPG" alt="">
NAB’s is of the opinion that the weakness in dwelling prices seen over the past year is likely to persist in 2018 and 2019 although they expect moderate rather than sharp price falls.
Having revised their forecasts NAB now predict that there will be a slightly larger decline in 2018 and a small fall in 2019 (which they previously predicted would be a small increase), driven by continued weakness in Sydney and Melbourne as well as a sharper decline in unit prices in Brisbane.
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NAB forecasts that house prices will flatten in aggregate in 2020.
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Confidence falls with Sydney housing market forecast to be the worst in 2018: NAB

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An ASIC investigation into loan fraud has resulted in a permanent ban of former National Australia Bank employees, Danny Merheb and Samar Merjan (also known as Samar Awad) from engaging in credit activities and providing financial services.
NAB alerted ASIC to the misconduct of its former employees, alleging that bank staff in the greater western Sydney area were accepting false documents in support of loan applications.
Mr Merheb was found to have recklessly given NAB false payslips, letters of employment, bank statements and statutory declarations in respect of home loan applications. Ms Merjan was found to have knowingly and recklessly given NAB false payslips and letters of employment in respect of personal loan and credit card applications.
The false information and documentation submitted by Mr Merheb and Ms Merjan were primarily provided to them by a third person who had no association with NAB. 
NAB has welcomed ASIC's decision.
Mr Merjan and Mr Merhab were both terminated from their employments with NAB in November 2015. 
The bans follow NAB's announcement of a remediation program for home loan customers in November 2017, after an internal review found some home loans may have been submitted with inaccurate customer information and/or documentation, or incorrect information in relation to NAB's Introducer Program.
ASIC also found that:
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<li>Mr Merheb falsely attributed a loan as being referred to NAB by an introducer who was a friend in order for the friend to receive commissions dishonestly;</li>
<li>Ms Merjan assisted the third person in the creation of two false documents, which she subsequently provided to NAB in support of lending applications; and</li>
<li>Ms Merjan was twice offered cash by the third person to process lending applications.</li>
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ASIC’s investigation is continuing.
Mr Merheb and Ms Merjan were permanently banned on 29 June 2018. They both have the right to lodge an application for review of ASIC’s decisions with the Administrative Appeals Tribunal.
On 16 November 2017, NAB announced a remediation program for home loan customers after an internal review, prompted by whistleblower reports it had received which found that some home loans may not have been established in accordance with NAB’s policies.
NAB identified that around 2,300 home loans since 2013 may have been submitted with inaccurate customer information and/or documentation, or incorrect information in relation to NAB’s Introducer Program.
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False payslips in NAB home loan applications triggers ASIC permanent ban 

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<div class="column">EXPERT OBSERVATION</div>
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<div class="column">We have delayed the timing of when we expect the RBA to start a gradual rate hiking cycle.  
The change reflects the fact there is no sign yet of stronger wages growth and unemployment has been stuck around 5.5% for the best part of a year.
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<div class="column">While still very data dependent we now have the start of the rate hiking cycle in mid-2019.</div>
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 We still expect the economy to strengthen, leading to a declining unemployment rate. This should eventually translate into stronger wages growth and give the RBA confidence that inflation will track back to its 2.5% target. However, we acknowledge there is considerable uncertainty around the timing at which wages growth will strengthen, and the time of the RBA’s next move will remain highly data dependent.
For some time NAB has been forecasting that if the economy were to improve as expected, then the RBA would at some point feel confident enough with the economic outlook to start the process of raising the cash rate from its current low level of 11⁄2%. In particular, our view has been that economic growth will strengthen over the coming year and that, with the pace of jobs growth already solid, this would lead to a declining unemployment rate and as a result upwards pressure on wages growth and inflation.
We still consider that this is the most likely trajectory for the economy and RBA policy. However, this week’s data on wages and the labour market indicate that November 2018, our previous forecast for the first rate rise, is too early and we now expect the RBA to be on hold through the rest of this year.
The unemployment rate ticked up 0.1ppt in April to 5.6%, and while the monthly data can bounce around, it adds to the evidence that progress in reducing the unemployment rate has stalled. The ABS measure of the trend unemployment rate has been at 5.5% since August last year; while jobs growth has been solid over this period, this has been offset by further increases in workforce participation. On the wages front, the Wage Price Index (WPI) for the March quarter 2018 was unchanged at 2.1% y/y, with private sector wages growth also unchanged at a slightly weaker 1.9% y/y and showing no signs of accelerating.
The RBA’s view on the outlook for the Australian economy is similar to NAB’s, in that it expects growth to strengthen, and for unemployment to decline leading to a pick-up in wages. The Bank continues to expect progress on unemployment, wages and inflation to be only gradual and has made clear that there is not a strong case for a near-term change in the cash rate. This week’s wage and unemployment data clearly will have done nothing to change this view. Quite reasonably, the RBA does not see 2% wages growth as consistent with 2.5% inflation over time and wants to see some pick-up in wages before lifting rates.
Click here <a href="https://www.propertyobserver.com.au/images/2018/5/21/NAB1.jpg" target="_blank">to enlarge.</a>
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We still believe that conditions are in place for wages growth to rise in the future. Our modelling of factors that affect wages – inflation, labour market underutilisation, productivity and the terms of trade - suggest that we would already have expected to see stronger wages growth. Clearly this has not happened and may reflect the need for the unemployment rate to get closer to its long-term ‘neutral’ rate of 5% or lower, before sufficient wage pressures emerge. This has been the experience of other countries in recent years.
Click here <a href="https://www.propertyobserver.com.au/images/2018/5/21/NAB2.jpg" target="_blank">to enlarge.</a>
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With the unemployment rate stuck around 5.5% recently, we now don’t expect the unemployment rate to get close to the 5% mark until mid-2019. That said, businesses continue to indicate – through our Quarterly Business Survey – that they are finding it increasingly difficult to find suitable labour; historically this has been associated with a decline in the unemployment rate, as well as the underutilisation rate and, ultimately, wages growth.
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As a result our forecasts for WPI growth are more conservative than the model projections but we still expect to see some acceleration in wages growth. We are projecting that by mid-2019 WPI growth will reach the 21⁄2% y/y mark. At that time, with unemployment close to its full-employment level, growth above trend and wages growth gradually accelerating, we expect the RBA would have sufficient confidence that inflation will move back towards target and so start to gradually lift the cash rate off its current very low level. 
We expect once the tightening cycle starts, further rate increases will be very gradual. We are now expecting the first move to be in mid (May) 2019, with the next move after that not until late in the year (November 2019).
Click here <a href="https://www.propertyobserver.com.au/images/2018/5/21/NAB3.jpg" target="_blank">to enlarge.</a>
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However we acknowledge that there is considerable uncertainty around the timing of the RBA’s next move. The divergence of wages growth from what is suggested by the models makes this uncertainty greater than usual. The RBA will remain heavily data dependent and will want to see sustained signs of a pick-up in wages growth before moving, even if the rest of the economy moves in line with expectations.
Alan Oster is group chief economist, National Australia Bank, and can be contacted <a href="https://business.nab.com.au/author/alan-oster/">here</a>.
 
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NAB push back RBA cash rate hike forecast to mid 2019

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EXPERT OBSERVER
The NAB Commercial Property Index rose 4 points to +21 in Q1 and sits comfortably above its long-run average (+3).
By segment, CBD Hotels continues to out-perform, aided by international tourism and favourable global economic conditions. Industrial property rose again, supported by transport &amp; logistics firms, warehousing, fulfilment and distribution centres. The Office market also bounced back with healthy demand in key eastern states and supported by strong business conditions and employment growth. Retail fell deeper into negative territory as challenging retail trade conditions continued to bite.
Click here <a href="https://www.propertyobserver.com.au/images/2018/4/18/index.jpg" target="_blank">to enlarge.</a>
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While confidence around Industrial and Office property has lifted, Retail confidence was down heavily and negative for the first time since mid-2013. This is consistent with NAB’s Business Surveys which also show an under- performing retail sector along with our own forecasts for subdued household spending in 2018 and 2019. Confidence was also a little lower in the CBD Hotels sector, but still highest overall.
By state, sentiment rose strongly in WA (but was still negative overall). Sentiment was also higher in NSW and SA/NT, but fell in QLD and was unchanged in VIC.
Property experts in all states are more confident about the overall commercial property market in next 1-2 years (bar QLD), with NSW and VIC the most upbeat and WA least confident (but also the biggest improver).
Expectations for capital growth in Office markets in the next 1-2 years have improved in all states bar QLD. The outlook for Industrial property is also stronger, but expectations for Retail capital growth were scaled back with negative or slow growth anticipated in all states. Overall, expectations for capital growth are still strongest for CBD Hotel property.
Click here <a href="https://www.propertyobserver.com.au/images/2018/4/18/hotel-future.jpg" target="_blank">to enlarge.</a>
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Overall Office vacancy rose to 9.0% in Q1 with a small rise in NSW. But NSW along with VIC are still the tightest markets for Office space (and set to remain so over outlook period). Office vacancy fell in WA, SA/NT and QLD and is expected to keep tightening in next 1-2 years (but remain relatively high), with over-supply to remain a key issue in these states.
Rental growth is expected to be fastest for Industrial and Office commercial property in the next 1-2 years, with VIC and NSW out-performing. Property experts also see rents recovering in WA, especially in Office. The outlook for rents in the Retail sector however remains very weak with negative growth expected in all states bar NSW (flat).
For the first time, Retail property experts were asked to assess the strategy acquisitions of A-REIT and ‘Other’ investors for next 12 months. Most (over 1 in 2) think they will focus on acquisitions and holding assets. But 1 in 5 also said ‘Other’ investors will likely divest, significantly more than in A-REITS where just 1 in 10 think they will divest.
Retail acquisition strategies are expected to be driven by concerns over the economy and consumer confidence, opportunities to acquire traditionally tightly held assets, concerns over online retail and entry of new players (like Amazon), all time high cap rates and concerns over changing consumer spending patterns. Most experts operating in the Retail property segment also think these changes will impact landlords negatively, especially large neighbourhood, sub-regional and regional areas.
Fewer property developers are looking to use land-banked stock for their new projects and an increasing number are also seeking new acquisitions, pointing to a period of stock rebuild. A higher than usual number of developers are also looking to refurbish existing property, suggesting more developers are also seeing this as a cost effective solution for their development needs.
Accessing funds (both debt and equity) needed for their property business is still a major challenge but less so than in Q4. But survey participants expect their debt funding and equity conditions to worsen again over the next 6-12 months.
Alan Oster is group chief economist, National Australia Bank, and can be contacted <a href="https://business.nab.com.au/author/alan-oster/">here</a>.
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National CBD hotels continue to out-perform as NAB's commercial property index rises

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EXPERT OBSERVATION
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Sentiment towards the Australian housing market improved in Q1 as strong gains in WA and QLD offset falls in NSW and VIC. 
Confidence improved sharply in WA, but fell further in NSW amid expectations for bigger price falls. 
NAB has lowered its house price forecast for 2018 on continuing weakness in Sydney and a softer Melbourne market.
NAB recently suggested they only see Sydney house prices falling in 2019, with a stabilization in 2020.
The NAB Residential Property Index rose 3 points to +23 in the March quarter 2018 and remains well above its long-term average (+14). 
“But the overall result is masking an ongoing shift in sentiment across states” NAB Chief Economist Alan Oster said. 
It fell further in NSW and Victoria, driven down by weakening house prices, and was also lower in SA/NT. 
Sentiment towards the housing market in WA however rose strongly and recorded its first positive read since early-2014. It also continued to strengthen in Queensland. 
Overall confidence levels were broadly unchanged, but have risen strongly in WA and softened in NSW. “Survey house price expectations are mirroring these trends” said Mr Oster. 
Property experts are predicting bigger house price falls in NSW and have scaled back their outlook for Victoria. 
But they are much more bullish in WA, with stronger growth also expected in Queensland. 
Among other key survey findings, the market share of first home buyers climbed to new survey high, but that of resident investors hit a new low. 
According to Mr Oster: “Recent efforts by state governments to improve housing affordability is helping first home buyers, especially in Victoria and NSW, but the APRA inspired crackdown in investor lending is hurting investors.” 
Surprisingly, there was a small increase in the share of foreign buyers in new property markets after having fallen to a 6-year low in the previous quarter. This was led by NSW and WA. 
“Property experts also continue to tell us that credit access is still the biggest constraint on new housing development in the country and the biggest impediment for buyers of existing property” Mr Oster said. 
But concerns over interest rates are growing. 
“We’re not surprised given NAB’s own view is that interest rates will start rising gradually from late-2018, albeit with the risk this could be delayed until 2019” said Mr Oster. 
NAB’s forecasts on residential prices 
NAB’s view for 2018 now has a small fall in house prices in 2018 (now -0.8% was +0.7%). This is largely related to continuing weakness in the Sydney market (-3.4%) and a softer Melbourne market (+0.1%) with little improvement now expected during 2018. 
According to Mr Oster: “Looking forward it’s hard to see a near term rebound in Sydney and Melbourne house prices, especially given consumer concerns over the cost of living and high levels of household debt.” 
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National Australia Bank Limited ABN 12 004 044 937 AFSL and Australian Credit Licence 230686 
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“Strong performances in Tasmania and to lesser extent in regional areas, along with higher confidence in the West and Queensland won’t offset the aggregate effects of lower prices in Sydney and Melbourne. Nor will increased first home owner demand fill the gap” added Mr Oster 
For 2019, our house price forecasts remain broadly unchanged at +0.8% with only Sydney expected to fall (albeit modestly). 
Apartment forecasts are also broadly unchanged (-0.8% in 2018 &amp; -1.8% in 2019) reflecting large stock additions and softer outlook for foreign demand. 
For 2019, weakness will likely be concentrated on the Eastern seaboard - with apartment prices expected to fall in Sydney, Melbourne and Brisbane. 
“Naturally, any additional changes to government or prudential policy to address affordability or financial stability concerns are likely to have an impact on these forecasts” said Mr Oster. 
About 300 property professionals participated in the Q1 2018 survey.
Alan Oster is group chief economist, National Australia Bank, and can be contacted <a href="https://business.nab.com.au/author/alan-oster/">here</a>.
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Housing sentiment improves in Q1, but falls further in New South Wales: NAB

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EXPERT OBSERVATION
Housing market conditions continue to soften with most capital city housing markets seeing price falls or slower growth, and transaction numbers remain lower than year ago levels. Auction clearance rates, while they have picked up from their late 2017 levels, remain below where they were a year ago. 
Melbourne house prices are also now also weakening and there are early signs of this occurring in Adelaide as well. Brisbane dwelling prices have been broadly flat in recent months while Perth, after a long period of falling prices, appears to have stabilised.
NAB recently suggested housing sentiment rose in Q1, however its WA and QLD that are dragging the softening Victoria and NSW.
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The Melbourne and Sydney housing markets have been affected by falling overseas demand. The NAB Residential Property Survey indicates that the foreign share of new property purchases reached a six year low at the end of 2017, although there was a small increase in foreign interest in the March 2018 quarter. 
In addition to lower foreign demand, policy changes have affected the investor market. This can be seen in housing finance approvals data; the value of investor finance approvals in January was down 12% on the same time last year. The weakening in investor finance was offset for a while by rising approvals for owner-occupiers, but even this has turned negative recently. 
As a result, in January 2018 the number of housing finance approvals (owner-occupier, ex refinancing) was almost the same as a year ago, after showing double digit growth in mid- 2017.
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We have slightly lowered our house price forecasts for 2018 and now expect a small fall in house prices (now - 0.8% was +0.7%), largely due to continuing weakness in the Sydney market and a softer Melbourne market. 
For 2019, the house price forecasts remain broadly unchanged at +0.8% with only Sydney expected to fall (albeit modestly). 
Apartment forecasts are broadly unchanged (-0.8% in 2018 &amp; -1.8% in 2019) reflecting large stock additions and a soft outlook for foreign demand. More details are available in the NAB Residential Property Survey.
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Dwelling investment has been trending down since Q3 2016. This can be seen in building approvals data, particularly for ‘other dwellings’ (principally apartments but also semi-detached dwellings). However, while building approvals remain off their peaks, there is little sign at this stage of further downwards momentum, and they remain relatively high by historical standards. Still strong population growth means that even as a large stock of apartments come onto the market over the next few years, we are unlikely to see a major correction. 
Nevertheless, we still see further small declines in dwelling investment in 2018 and 2019 before stabilising in 2020.
Alan Oster is group chief economist, National Australia Bank, and can be contacted <a href="https://business.nab.com.au/author/alan-oster/">here</a>. 
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