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

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National Australia Bank have cut their three-year fixed investor interest only deals, making it the cheapest lender of the big four.
CBA have their rates at 4.29 percent, ANZ are at 4.49 percent and Westpac are the only one breaking the 4.5 percent barrier at 4.54 percent.
NAB were the last of the big four banks this month to announce it was moving a number of its fixed rate loans, with the other three making cuts earlier in March.
Some loans, such as the five-year fixed owner occupier principal and interest, has been by 50 basis points. It went from 4.59 percent to 4.09 percent.
Three-year, interest-only fixed deals for investors have dropped from 4.49 percent to 4.19 percent.
All the changes only apply to new fixed rates deals and not for existing borrowers.
A NAB spokeswoman said the changes was a result of the bank wanting “to help Australians achieve their property goals.”
The Reserve Bank of Australia board this week kept the cash rate on hold at 1.5 per cent.
AMP Capital's Shane Oliver, among other experts, believes there may not be another cash rate move until later this year or in 2019.
 
 
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jonathanchancellor-7SQnKwU6yx

NAB cut investor interest only deals and outdo other big four 

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Fractional property investment platform BrickX have announced that NAB Ventures, National Australia Bank’s corporate venture capital arm, has invested in the startup.
The deal is part of a $9 million Series A funding round.
BrickX allows Australians to invest in residential property by buying 'Bricks' in a BrickX property.
The platform means people can invest in residential property for a few hundred dollars.
NAB Ventures – which supports businesses and entrepreneurs in their quest to build leading technology companies – saw the investment potential in democratising property ownership in the Australian market.
The value of BRICKX in providing Aussies with a financial stepping stone to achieve the Australia Dream of home ownership was another driver for investment. 
BrickX CEO Anthony Millet said BrickX is expanding rapidly.
“Housing affordability continues to be a priority for Australia’s banks, so the alignment between BRICKX and NAB Ventures has a strong and unified purpose.
“The prohibitive costs and high deposits needed to gain access to the property market, has left many out in the cold. However, BRICKX has opened up the residential property asset class as an alternative investment to any of the traditional investment options. 
“Considering the recent volatility in the cryptocurrency and stock markets, Australians are recognising the longer-term stability of property prices.” 
Todd Forest, Managing Director of NAB Ventures, said he was excited to invest in BRICKX and help support a new way of approaching property ownership. 
“The aspiration for property ownership has long been the Australian dream, however buying a property often has challenges for many consumers – such as the rise in house prices in some areas and trying to save for a deposit. 
“BRICKX is disrupting this journey, in how it provides consumers with access to the property market and engages with them in creating a pathway to property ownership.
“NAB Ventures chose BRICKX as the leading opportunity, based on its unique business model, exceptional user experience and the opportunity to leverage the platform to innovate and help more Australians with their home ownership goals.” 
Founded in 2014, BRICKX launched to retail investors in September 2016 and has grown to offer 14 properties across Sydney, Melbourne and Adelaide along with more than 9,000 members.
They have properties in Sydney's Mosman, Manly, Potts Point, Darlinghurst and Bondi Beach, as well as a terrace home in Melbourne's Brunswick and a stone fronted villa in South Adelaide.
The NAB Ventures investment in the 'Series A' funding round for BRICKX follows on from Westpac’s Reinventure investment in late 2017.
Since the Reinventure investment, the number of BRICKX members has grown by nearly 25%. 

 
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j.ballantyne1990-6AQqhLzZaK

NAB banks on property tech disruptor BRICKX to rebuild hope in the Australian Dream

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GUEST OBSERVER
Weak wages growth and slow progress reducing unemployment means it is now less likely that the RBA will raise rates twice in 2018 (our previous forecast).
We now see the RBA raising rates only once in late 2018 – with November 2018 as the most likely start date for a gradual RBA rate hiking cycle.
By late 2018 growth should be near 3% and the unemployment rate approaching 5%. That, together with increasing tightness in employers’ ability to find suitable labour, may finally see private sector wages start to moderately edge up.
Inflation by that time should also be approaching the bottom of the 2-3% target range.
That said, much will still depend on the data flow – it is not impossible that the RBA stays on hold for all of 2018 and raises rates in early 2019.
For some time NAB has been forecasting that if the economy continues to improve as we expect, then the RBA’s confidence that inflation will return to their 2-3% target band would grow and with that they would begin to lift the cash rate from its current low level of 1½ percent.
We have emphasised that the key data that will give the RBA this confidence is a turn in the recent depressing trend on wages growth.
Last week’s Q4 2017 wage numbers were in that sense a little disappointing.
While total wages did increase a touch (to 0.55% unrounded) there was no acceleration in private wages growth. That stands in contrast to traditional models that suggest wage increases are overdue and runs counter to employers’ reports that it is getting more difficult to find suitable labour.
Click here <a href="https://www.propertyobserver.com.au/images/2018/2/28/private.jpg" target="_blank">to enlarge.</a>
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Click here <a href="https://www.propertyobserver.com.au/images/2018/2/28/labour.jpg" target="_blank">to enlarge.</a>
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In recent RBA communications (including the Statement on Monetary Policy and the Governor’s testimony to the House Standing Committee on Economics) the RBA has emphasised that they expect to make further progress reducing unemployment with some uptick in wages and inflation likely as a result. But the Bank has emphasised that this progress is expected to be “gradual”.
It is also worth noting that the Australian labour market remains in a somewhat different state than the US labour market. In the US, most estimates of the NAIRU are significantly higher than the current level of unemployment (4.1%). In contrast most estimates of the Australian NAIRU are around 5% (or possibly lower).
That is lower than the current unemployment rate which has been stuck around 5.5% in recent times. In addition, Australia’s labour underutilisation rate is nearer 14% and hence there is some more slack in the labour market than is implied by purely focussing on the unemployment rate. That said, underutilisation in now falling, and usually declines when firms report rising difficulty finding suitable labour.
Our wages model (above) uses underutilisation of labour (as well as inflationary expectations, productivity and the terms of trade – the latter as a proxy for mining wages). The model supports the RBA’s expectation that wages should begin to increase. The outlook for wages is important not just for its implications for inflation but also its ramifications for private sector consumption.
With increased utility prices consumers are still cautious about discretionary retail spending and there are of course ultimately limits as to how far savings can be run down. Our current forecasts see the broader economy still growing at around 2.9% in 2018 and 2.8% in 2019. While we will review these forecasts after next week’s national accounts and the February Monthly NAB Business Survey, our general view is that better business investment and infrastructure spending will offset a still cautious consumer (with delayed LNG exports also helping in 2018).
That said, we remain a little more cautious on the consumption outlook than the RBA in 2019. The RBA comments on the housing market (and financial stability) seem more relaxed recently given the success of APRA in slowing investor credit and house prices- especially in Sydney - however that too will do little to encourage consumption. Based on current data, August 2018 (our previous forecast start point for rate hikes) now appears too soon for the RBA to make a start despite the better global picture, which will see other central banks tighten further.
Finally while price competition (especially online retailing) will keep inflation relatively low for some time, our judgement remains that by late 2018 the RBA will feel sufficiently relaxed on the domestic fundamentals to cautiously start withdrawing the stimulatory policy stance it is currently running. Again however, the data flow will be critical with key determinants including: the strength of wages and consumer spending, unemployment and obviously core inflation. For 2019 we still have another two rate rises but well spread (May and November).
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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jrobinson-rf4aSBido9

NAB drops cash rate predictions from two hikes to just one for 2018

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Fraud at Aussie Home Loans will be examined by the banking royal commission’s first public hearing later this month.
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The financial services royal commission is targeting lenders over alleged cases of home loan fraud, along with unsuitable credit card limit increases and their car financing practices.
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The big four banks will all feature prominently in the inquiry's first round of public hearings focusing on inappropriate or unsuitable lending in home loans.
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The commission's target will be "fraudulent brokers and broker arrangements" at Aussie Home Loans.
It will look at the Commonwealth Bank's "accreditation of brokers and broker arrangements".
It will look at NAB's "Introducer Program and fraudulent loan applications".
The Introducer Program was rewarding "introducers" who successfully referred people to the bank for a loan, despite many of the applications being submitted with false information including doctored payslips. 
The bank issued 2300 home loans, which mainly went to foreign buyers of Australian property sold via "introducers."
Twenty bankers were caught breaching lending policies.
The hearings will be held in Melbourne from March 13 until March 23.
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NAB and Aussie Home Loans fraud to be examined by banking royal commision

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Overall sentiment around commercial property (measured by the NAB Commercial Property Index) moderated a little in Q4 (down 1 to +17) but is still well above the long-term average (+2). 
NAB Group chief economist Alan Oster said positive sentiment likely reflected a steady economy, healthy employment growth and strong business conditions.
CBD Hotels out-performed all other sectors, while retail sentiment fell quite sharply and turned negative for the first time since mid-2014.
Industrial sentiment also lifted, amid continued reports of strong warehousing and logistics activity linked to growth in online retail (including Amazon) and e-commerce. 
Office has eased but is still out-performing.
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“Not surprisingly, NAB’s Business Survey also showed retail was the only industry sector reporting negative business conditions” said Mr Oster. 
By state, sentiment was broadly unchanged and strongest in NSW (+33 points), followed by VIC (+20) where it softened somewhat but was still relatively solid. 
A weaker outcome was also reported in WA (-44) where the ongoing transition from the mining investment boom continued to weigh on both economic growth and local commercial property markets. 
Overall confidence levels fell to their lowest levels in 2 years and fell in all sectors - except CBD Hotels.
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“It fell most in Retail, which is not surprising given NAB’s own outlook for wages suggests that any improvement in consumer spending will be slow, especially if wealth effects have an impact as house prices ease” said Mr Oster. 
Property experts in all states were less confident about overall commercial property markets in the next 1-2 years. NSW is still the most upbeat state, and WA and SA/NT the least confident (and negative).
 
The survey also indicated that property developers were more hesitant about entering the market in Q4, perhaps reflecting concerns about over-supply in some segments such as high density apartments. 
Australia wide, the number developers intending to start new building works in the next 6 months fell to 47% in Q4 below its long-term average (51%). 
“Property experts are also telling us that debt and equity funding is still difficult to obtain and most don’t expect any improvement in their funding conditions any time soon” said Mr Oster. 
About 300 panellists participated in the Q4 2017 Survey. 
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Retail sentiment falls sharply as sentiment in commercial property moderates: NAB 

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Australian housing market sentiment was unchanged in the final quarter of 2017 but confidence levels softened, says NAB.
The NAB Residential Property Index had sentiment towards the residential property market remaining positive in most states.
“Trends have however been mixed in recent quarters and the latest survey showed a clear shift in momentum from the key eastern states towards the rest of the country” NAB chief economist Alan Oster said.
Sentiment jumped sharply in SA/NT to lead the country as expectations around house prices and rents edged up. WA also reported its strongest read since early-2014 but still negative.
In the key Eastern states, sentiment fell sharply in Victoria from very high levels. In NSW, the slowdown in dwelling prices appears to be having a much bigger impact with sentiment falling further to its lowest level in 2 years. Queensland was largely unchanged.
Confidence levels (based on forward expectations for prices and rents) also turned down, led by NSW and Victoria, with SA/NT the big improver.
“This improvement mirrors recent findings in our own business survey which shows SA also reporting above average business conditions and strong confidence” said Mr Oster.
Average survey expectations for national house prices over the next 1-2 years were pared back in all states except SA/NT. NSW is the only state where property experts expect prices to fall - and for two years.
<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/2018/2/2/HOUSE_CHARTS.jpg" alt="">
First home buyers (especially those buying for owner occupation) continued to raise their profile in new and established housing markets in the December quarter, with their share of total demand reaching new survey highs. Overall, they accounted for almost 2 in 5 sales in new housing markets and around 1 in 3 in established markets.
The share of foreign buyers in Australian housing markets however continued to fall in Q4, dropping to a 6-year low 8.4% in new property markets and a 5-year low 5.5% in the established housing market.
“Clearly, the efforts of policymakers both domestic and offshore to stem the tide of foreign capital entering Australian property markets are bearing fruit” said Mr Oster.
NAB’s assessment of the housing market direction for 2018 remains largely unchanged, although the degree of moderation has been ramped up considerably - mainly driven by revisions to Sydney prices, where recent price trends have been most concerning and prudential measures are likely to have the biggest impact.
House prices are forecast to increase by only 0.7% in 2018 (previously 3.4%), with growth remaining subdued at 0.8% in 2019.
The apartment market is expected to underperform, reflecting large additions to the apartment stock and a soft outlook for foreign demand. Unit prices are forecast to fall 0.9% in 2018 (previously +0.5%), and decline another 1.8% in 2019.
<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/2018/2/2/UNIT_CHART_NAB.jpg" alt="">
“By capital city, house price growth is forecast to be solid in Melbourne and Hobart, followed by Brisbane and Adelaide. Perth is expected to stabilise, marking the beginning of a gradual turnaround for the market, while we expect to see a fall in Sydney prices for the first time since 2011” said Mr Oster.
Most cities are expected to remain muted, if not ease further, in 2019. Unit prices are expected to fall in Brisbane and Sydney over 2018, while Melbourne will join the fold in 2019 as new supply further dampens the market. 
“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 Q4 2017 survey.
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Sydney only capital with predicted house price falls over next two years: NAB

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National Australia Bank Limited has refunded $1.7 million to 966 home loan customers after it failed to properly set up mortgage offset accounts.
Following customer complaints, NAB conducted an internal review which found that between April 2010 and August 2017 it had not linked some offset accounts to broker originated loans.
It resulted in those customers overpaying interest on their home loan.
NAB has refunded affected customers so that they are only charged interest that would have been payable had the mortgage offset account been properly linked from the commencement of the home loan.
'Consumers should be confident that when they sign up for a home loan they are receiving all of the benefits that are being promoted,' Acting ASIC Chair Peter Kell said.
'Where there are errors there should be timely and appropriate action to ensure that consumers are not any worse off as a result of the mistake.'
NAB reported the issue to ASIC. NAB has also engaged PwC to review the remediation approach and to ensure NAB's compliance systems will prevent a similar error from occurring in future.
NAB has commenced contacting and refunding affected customers. Customers who have any questions about their accounts should contact NAB on 1800 152 015.
<h2>Background</h2>
An offset account is a savings or transaction account that is linked to a home loan account. Any money in the offset account reduces the amount of interest payable on the linked home loan. For example, if the outstanding balance on the home loan is $300,000 and there are savings of $50,000 in the offset account, then interest is only payable on the difference ($250,000).
In this case, NAB failed to link some offset accounts to home loan accounts, which meant that money held in those offset accounts did not reduce the interest payable on the home loan accounts. As a result, consumers paid more in interest than was required.
NAB also conducted a broader investigation which found that the issue only applies to broker originated loans.
NAB will also remediate customers who had an offset account during the relevant period but had repaid their home loan before 2017.
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NAB refunds home borrowers after mortgage offset system failure

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National Australia Bank (NAB) has sacked 20 bankers and disciplined another 32 for selling home loans to customers whose eligibility may have been in question.
NAB said in a media release it had “commenced a remediation program for some of its customers, after a review identified their home loan may not have been established in accordance with NAB’s policies”.
Around 2,300 home loans since 2013 have been identified as submitted without accurate customer information and/or documentation, it added.
The bank became aware of the matter in October 2015, and advised ASIC in December 2015 after an initial high-level review. 
“What occurred was unacceptable. We have investigated this matter thoroughly, and, as we have always said, whenever we find issues we will investigate them, fix them, and hold people to account – and we did,” said Andrew Hagger, NAB’s chief customer officer, Consumer Banking and Wealth.
Following the investigation, 20 bankers in New South Wales and Victoria have been sacked while another 32 bankers had “consequences applied” including pay cuts.
Many of the customers who took the loans in question are from overseas and NAB has has commenced writing to them asking them to participate in a detailed review of their loan, which may include verification of documents submitted at the time of their home loan application. 
It said affected customers may be offered compensation as appropriate.
NAB said it is working with ASIC to ensure the remediation program provides fair outcomes for customers. 
“The remediation program has been designed with reference to the methodology applied by the Financial Ombudsman Service, and with NAB’s standard approach to compensating customers. NAB will engage an independent expert to undertake regular audits of the remediation program, and will update ASIC every two months on its progress,” said the media release.
“I want to assure all of our customers that we have improved our systems, processes and programs as a result of what occurred here,” Hagger said.
The changes will apply to NAB’s Introducer Program, including enhanced governance and eligibility criteria.
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NAB sacks 20 bankers for incorrect documentation on 2,300 loans

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Ann Sherry, the current head of Carnival Australia, the largest cruise ship operator in Australasia, is joining the NAB board.
Sherry is a former chief executive of Westpac New Zealand.
Sherry spent 12 years in senior roles with NAB's rival before joining the cruise ship operator in 2007.
She is also a non-executive director for Sydney Airport, the Palladium Group and Infrastructure Victoria.
She is on the board of Australian Rugby Union, Tourism &amp; Transport Forum and the Museum of Contemporary Art.
Dr Ken Henry, chair of the NAB, says she brings extensive banking and business skills together with a deep understanding of how to drive the right culture, community engagement and customer focus.
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Ann Sherry sails onto NAB board

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An improvement in market sentiment across most states in the third quarter of 2017 suggests there may still be some legs left in the housing market, with Melbourne showing promising growth while Sydney slowing from the 20 percent rises, according to NAB's latest survey. 
Market conditions continue to vary considerably across locations, with each city seemingly at very different stages of their housing cycles, says NAB Residential Property Survey.  
Annual property price growth across eight capital cities has moderated only marginally to 8.5% y/y in September, down from this year’s high of 11.4% in May. 
“Sydney, Melbourne and Hobart have each continued to see double digit yearly rates of growth, although the momentum is clearly with Melbourne and Hobart, as Sydney is seeing a much more pronounced slowing in recent months - a trend that is reflected in other measure of the market pulse, including auction volumes, clearance rates, and market sentiment,” it says. 
Perth housing prices remain lower from the same time last year, although the decline has slowed since mid-2016, consistent with expectations that the worst of the economy’s post mining boom woes may be over. 
“But despite prices remaining a little more resilient than expected this quarter (outside Sydney), we have maintained our view for more muted market performance going forward, particularly following our revised expectations for RBA rate hikes which have been brought forward to mid-2018 (from H2 2019),” said NAB. 
Hobart has outperformed others in annual growth, with prices rising more than 14% over the year to September. 
In the bigger east coast markets, Melbourne has seen the strongest growth, rising around 12% over the year. Sydney is close behind, at 11% growth, but well below the nearly 20% growth earlier this year. 
For the other capital cities, the Brisbane and Adelaide markets are seeing more modest gains, which are more in keeping with subdued increases in household income, while Darwin is the only other major city besides Perth to see declines over the past year, NAB said.
<a href="https://www.propertyobserver.com.au/images/2017/10/16/NABHousing.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/10/16/NABHousing.png" alt="">
<a href="https://www.propertyobserver.com.au/images/2017/10/16/NABUnits.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/10/16/NABUnits.png" alt="">
Detached house prices have generally performed better across most markets. In many cases that simply reflects the land component of the property price, however, the apartment segment in some markets have also come under pressure from supply-side concerns, such as Brisbane, where reports of settlement issues have become common. 
Melbourne has often been cited as a market with apartment oversupply risk as well, however, solid population growth and an overall buoyant housing market has helped to underpin near double digit growth in unit prices - similar observations can also be made for Sydney, said NAB.
“We have long anticipated a definitive shift to more moderate market conditions, brought about by a combination of factors (which vary across markets) including deteriorating affordability, rising supply (primarily apartments) and tighter credit conditions following the macro prudential response to financial stability concerns (mainly targeted at investors). 
“While we are yet to see clear evidence of that, we continue to hold this view - although recent price trends suggest the timing of the shift may vary somewhat across markets. Additionally, we anticipate an even higher degree of uncertainty around the price outlook than usual given the relatively unchartered waters of macro prudential intervention,” the note said.
It added that regulatory intervention are often thought to have their greatest (dampening) impact on the market early on, before losing their potency over time - making the seemingly divergent trends between the Sydney and Melbourne markets at present all the more perplexing. 
“This could suggest some upside risk to our outlook should prudential policy lose potency, helping Sydney regain some of its previous price momentum. Foreign demand is another consideration that is difficult to ascertain.”
The survey noted the impact of policy to curb foreign capital entering the Australian property market.
It said that there were a number of positive elements that should support the market enough to prevent a severe adjustment in prices (assuming important factors such as the economic outlook play out largely as expected). 
Mortgage rates remain near record lows (despite a tightening in credit conditions earlier this year), and some lenders appear to be taking their foot off the brake again more recently - according to RBA data the discounted variable mortgage rate has returned to its previous low. 
That is helping to keep mortgage interest payments well down on previous peaks (as a share of disposable income), despite disappointing growth in incomes. 
Meanwhile, the housing supply-demand balance remains quite favourable, with most cities (excluding Perth and Darwin) seeing rental vacancy rates in undersupplied territory (below 3%), consistent with NAB estimates that show a high degree of pent-up demand for housing in many states (especially NSW and Victoria) - population growth in Victoria has been particularly strong, and is expected to remain elevated. 
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