A landmark former orphanage site in Surrey Hills could be transformed into a new residential community under plans lodged by <a href="https://www.apartments.com.au/developers/antipodean-land-developments">Antipodean Land Developments</a> that would deliver 76 apartments and townhouses while restoring some of the suburb's most significant heritage buildings.

The burgeoninng Melbourne-based developer has submitted plans for the 9,158 sqm site at 1 Kent Road and 24 Durham Road, home to the former St Joseph's Home for Destitute Children, a historic institutional complex dating back to the late 19th century. The proposal seeks to adaptively reuse several heritage buildings while introducing two new four-storey residential buildings set within extensive landscaped grounds.

Designed by <a href="https://www.apartments.com.au/architects/woods-bagot">Woods Bagot</a> and Kerstin Thompson Architects, the project has been conceived as a contemporary residential village embedded within a restored heritage precinct. The development team describes the design approach as "The Village in the Garden," with new buildings positioned among mature landscaping by OCULUS and significant heritage structures.

<img alt="First look: Antipodean Land Developments plans heritage-led apartment community in Surrey Hills" data-entity-type="file" data-entity-uuid="44ec8c1b-c0b6-44ae-859e-5811b3e6a023" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Untitled%20design%20%281%29.png?VersionId=p.p1_KFh4iQoV4nisdnPfQBAsWNi7m79" />

The proposal would deliver 76 dwellings comprising a mix of apartments and duplex-style residences, significantly increasing housing supply on one of the largest privately held residential landholdings in Surrey Hills. The development includes 127 car spaces, 24 bicycle spaces and more than 1,000 sqm of communal amenity, with the existing chapel building earmarked for conversion into resident facilities.

According to the planning submission, the project centres on the restoration and adaptive reuse of the site's most significant heritage assets, including the original c.1889 St Joseph's building, the chapel designed by architect Augustus Andrew Fritsch, and the historic brick perimeter walls and entry gates. The proposal also incorporates the retention of other contributory buildings including the former infirmary and school building.

Tract Consultants, in the planning report accompanying the application, said the scheme had been shaped through extensive heritage analysis and design development.

"The shared vision for the Site by the project team has culminated in a scheme which successfully breathes life back into a historic site while delivering upon the objectives of Victoria's Housing Statement in a carefully curated and contextually responsive manner."

<img alt="First look: Antipodean Land Developments plans heritage-led apartment community in Surrey Hills" data-entity-type="file" data-entity-uuid="7263b7d8-95ea-400f-9531-6ca7d22c3c33" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Untitled%20design%20%282%29.png?VersionId=4cR1tiWOsDpgxEOwZi5vVFcyvvOsYkIE" />

The proposal is being assessed under Victoria's Significant Residential Development with Affordable Housing pathway. As part of the application, three per cent of the project's residential development cost would be contributed to the Social Housing Growth Fund. The development would also provide a diverse mix of one, two and three-bedroom residences targeting a broader range of buyers than typically found in Surrey Hills' detached housing market.

Sustainability initiatives include an anticipated 66 per cent BESS score, natural cross-ventilation to 80 per cent of apartments, 28 per cent deep soil landscaping and a canopy cover outcome exceeding local planning requirements. The proposal also sets aside more than 1,083 sqm for communal indoor and outdoor resident amenity spaces.

<img alt="First look: Antipodean Land Developments plans heritage-led apartment community in Surrey Hills" data-entity-type="file" data-entity-uuid="33fad46f-fe26-4d0a-acfd-6b776e1c6a3d" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Untitled%20design.png?VersionId=D9F6WVSyYCtGvSUmith35LRp6R7PQkw_" />

Planning documents describe the property as one of the largest underutilised residential sites in Surrey Hills, arguing it presents a rare opportunity to introduce "missing middle" housing in an established inner-eastern suburb while preserving and revitalising a significant heritage precinct.

Antipodean Land Developments has built a reputation for design-focused residential projects across Melbourne, particularly in the medium-density sector. Previous developments include Neighbourhood in Brunswick East, delivered with Breathe Architecture, and Balfe Park Lane, designed by Kerstin Thompson Architects.

They've been very active in site acquisition as they build out their future development pipeline. They recently launched Thornubury House, 45 apartments above a mix of commercial, retail, and food and beverage tenancies, and have plans for a boutique project in Fitzroy and another <a href="https://www.apartments.com.au/news/vic/antipodean-plan-apartments-for-deepdenes-missing-middle-on-whitehorse-road">"missing middle" project</a> on Deepdene's Whitehorse Road.

Joel Robinson

First look: Antipodean Land Developments plans heritage-led apartment community in Surrey Hills

Developer <a href="https://www.apartments.com.au/developers/auyin-property-development">Auyin</a> is the latest to turn to the Victorian Government's Development Facilitation Program in an effort to secure approval for its long-planned, mixed-use project in Elsternwick.

In 2018, Auyin lodged plans with Glen Eira City Council for a 14-storey building, however Council approved a reduced eight-storey scheme. A subsequent VCAT appeal in 2019 upheld the eight-storey height limit.

The project was later amended to nine storeys, but Auyin is now seeking to revive something closer to its original vision. The developer argues that the planning context has evolved significantly over the past decade, particularly within the Elsternwick Activity Centre, where higher-density development has increasingly been encouraged along Glen Huntly Road.

The proposal would transform the 1,239 sqm site at <a href="https://www.apartments.com.au/new-apartments/7-12-horne-street-elsternwick-vic-3185">7-15 Horne Street</a>, opposite Elsternwick Railway Station, into a 13-storey residential and retail development designed by CBG Architects, with 40 apartments

The site currently comprises three commercial properties.

<img alt="First look: 13-storey mixed-use tower planned for Elsternwick activity centre" data-entity-type="file" data-entity-uuid="5f465dd4-509b-4082-a669-0253b313914b" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/elsternwick%20podium.png?VersionId=72frWi0SmQ5AVJ3ARRhX5ILUYObhTm7x" />

The proposed apartment mix comprises 25 two-bedroom and 15 three-bedroom residences above 200 sqm of retail space at ground level. Residents would have access to a 90 sqm wellness facility, a 351 sqm communal indoor and outdoor terrace on the third level, and extensive landscaped areas throughout the development. A publicly accessible 135 sqm plaza would be created on the north-east corner of the site, providing seating, landscaping, and a new gathering space adjoining Horne Street.

The design adopts a four-storey podium that references the finer-grain character of the surrounding streetscape, with the upper tower recessed behind generous setbacks on all boundaries.

<img alt="First look: 13-storey mixed-use tower planned for Elsternwick activity centre" data-entity-type="file" data-entity-uuid="e637e763-2abc-4c34-a0aa-5c7ad36fae18" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/elsternwick%20open.png?VersionId=J1AoOpZgTyaF.KeeFSX6lMjEScX8KKRi" />

A key element of the proposal is the reconfiguration and widening of the surrounding laneways. Vehicle access would be retained from Lois Lane, with upgraded pedestrian connections linking Ross Street and Horne Street. The development would provide 58 residential car spaces, two retail car spaces, and 52 bicycle spaces across two basement levels and ground-floor facilities.

Architecturally, the building draws inspiration from the established character of Elsternwick Village. The façade combines dark charcoal brickwork, textured concrete, bronze-toned metal detailing, and extensive planting integrated into podium and tower levels. The design also incorporates a chamfered corner treatment and publicly accessible plaza intended to strengthen pedestrian activity around the station precinct.

Elsternwick's last new development completion was&nbsp;EVA Elsternwick by Pitard late last year. <a href="https://www.apartments.com.au/developers/milieu-property">Milieu</a> is working away on its nature-led neighbourhood, <a href="https://www.apartments.com.au/new-apartments/elsternwick-gardens-by-milieu-8-gordon-street-elsternwick-vic-3185">Elsternwick Gardens</a>, on Gordon Street, with its first stage expected to complete next year.

First look: Auyin seeks mixed-use apartment project in growing Elsternwick Activity Centre

<a href="https://www.apartments.com.au/new-apartments/otium-parkdale-123-125-como-parade-east-parkdale-vic-3195">Otium Parkdale</a>, the 13-residence boutique development by&nbsp;<a href="https://www.apartments.com.au/developers/huxtable-property">Huxtable Property</a>, has entered its final stages of delivery, with completion expected within the coming month and more than half of the residences sold.

The Como Parade East project is nearing the finish line at a time when opportunities to purchase new apartments in <a href="https://www.apartments.com.au/developments/parkdale-vic-3195">Parkdale</a> remain exceptionally limited. Fewer than 10 per cent of dwellings in the bayside suburb are apartments, making developments like Otium a relatively rare addition to a market traditionally dominated by detached housing.

[smartcode_project:default project_id=134974 project_image_fid=5427]

The three-level development comprises 13 residences, including ten two-bedroom apartments and three larger three-bedroom homes, all positioned above a secure basement car park.

Designed by <a href="https://www.apartments.com.au/architects/almeida-architects">Almeida Architects</a> with a strong connection to its coastal surroundings, Otium combines red brick, exposed concrete and dark metal detailing with integrated landscaping and greenery. Expansive glazing, generous balconies and terraces have been incorporated throughout the design to maximise natural light and reinforce indoor-outdoor living.

Inside, the residences feature engineered European oak flooring, natural and reconstituted stone benchtops, Bosch kitchen appliances, ducted heating and cooling, lift access and secure entry systems. The larger three-bedroom residences on the upper level have been designed with house-like proportions, while the two-bedroom apartments prioritise functionality, flexibility and low-maintenance living.

[smartcode_project:default project_id=134974 project_image_fid=5421]

The project is now in its final stages, with <a href="https://www.apartments.com.au/builders/labco">Labco</a> completing the remaining landscaping and external finishing works following the completion of the residences' interiors.

Otium's location within the heart of Parkdale continues to underpin its appeal. Residents will be just steps from local cafés, restaurants, shops and the newly elevated Parkdale Station, while the beach is less than a kilometre away.

With the project tracking ahead of schedule, buyers can currently secure a residence with a five per cent deposit and benefit from settlement terms of up to eight months. The advanced stage of construction also provides buyers with the opportunity to walk through the near-complete residences and experience the quality and finishes firsthand ahead of completion.

[smartcode_project_cta:default project_id=134974]

Otium Parkdale enters final month before completion as rare apartment opportunity nears sellout

A new boutique apartment development is entering the market in <a href="https://www.apartments.com.au/developments/chermside-qld-4032">Chermside</a>, with Brisbane-based developer <a href="https://www.apartments.com.au/developers/ausdev">Ausdev</a> bringing 33 residences to a well-connected pocket of Brisbane's north.

<a href="https://www.apartments.com.au/new-apartments/parkdrive-apartments-chermside-25-sammells-drive-chermside-qld-4032">Parkdrive Apartments</a>, at 25 Sammells Drive, will comprise a mix of one- and two-bedroom residences positioned within walking distance of Westfield Chermside, The Prince Charles Hospital, and Bradbury Park.

Established in 1989, Ausdev has a long-standing presence across both development and construction, with Parkdrive Apartments representing its latest residential project in Brisbane's northern suburbs.

[smartcode_project:default project_id=152125 project_image_fid=363778]

The development has been designed around open-plan living and natural light, with residences featuring stone benchtops, timber cabinetry, BOSCH appliances, and private balconies that extend the living areas outdoors.

Kitchens are positioned as the centrepiece of the homes, incorporating natural material palettes and integrated appliances, while bathrooms have been designed with a focus on functionality and understated finishes.

Residents will have access to a communal barbecue and entertaining area on Level 3, providing shared outdoor space within the development. Secure parking and lift access are also incorporated into the building.

The project will deliver a limited collection of 33 apartments, with one-bedroom residences priced from $749,000.

[smartcode_project:default project_id=152125 project_image_fid=363782]

Beyond the building itself, the location places residents within easy reach of several of Chermside's key amenities. Bradbury Park is around 350 metres away, while Westfield Chermside is approximately 1.3 kilometres from the site. The Prince Charles Hospital is located within 750 metres, and the Chermside Bus Interchange is around 1.5 kilometres away, providing connections across Brisbane.

Parkdrive Apartments adds to the growing residential pipeline in Chermside, a suburb that continues to evolve as a major retail, healthcare, and transport hub for Brisbane's north.

[smartcode_project_cta:default project_id=152125]

Ausdev introduces boutique Parkdrive Apartments to Chermside's growing centre

<a href="https://www.apartments.com.au/developers/skymark-group">Skymark</a>'s boutique Cronulla development Solis has secured a 10-year Latent Defects Insurance policy through Resilience Insurance, providing buyers of the 16-residence building on Ewos Parade with structural and waterproofing protection that extends a decade beyond the building's completion.

Currently under construction and due for completion in late 2027, <a href="https://www.apartments.com.au/new-apartments/solis-cronulla-8-ewos-parade-cronulla-nsw-2230">Solis</a> is one of a small number of new developments in the Sutherland Shire to carry Resilience LDI coverage, a distinction that carries increasing weight as buyer confidence in the off-the-plan sector continues to be shaped by how developers stand behind their product.

Latent Defects Insurance, which entered the Australian market in 2022 when Resilience Insurance was approved to offer the cover, protects buyers against major structural or waterproofing defects for ten years post-completion. Unlike traditional statutory warranties, it operates as a first-resort policy, if a covered defect arises, the insurer responds directly, without the buyer needing to pursue the builder or developer through a lengthy claims process.

Resilience Insurance CEO Corey Nugent has noted that the product addresses something fundamental to the new apartment market.

"The overarching feedback from prospective buyers in the new development space is that they want more confidence and assurances around the quality of the build," Nugent says.

"Resilience Insurance Latent Defects Insurance not only gives them complete peace of mind for 10 years, but it shows the developer they are buying from is standing by their product."

[smartcode_project:default project_id=150499 project_image_fid=370898]

For Solis, the Resilience LDI policy adds a meaningful layer of accountability to an already considered project. The development comprises nine two-bedroom and seven three-bedroom residences, including one dual-level three-bedroom apartment, across a five-storey building on Ewos Parade, positioned between Shelly Beach and South Cronulla.

Garden apartments connect directly to private landscaped courtyards, while upper-level homes capture beach views to the east from level four and above.&nbsp;

All 16 residences include at least one balcony or courtyard, and select apartments on the upper floors feature bar areas and secondary flexible living spaces.

Hiba Sander, Managing Director of Skymark, says Solis offers a rare balance, nestled between the quiet beauty of secluded beaches and the lively charm of South Cronulla's esplanade.

"It's a place to choose your pace and live gracefully, seaside'," Sander says.

[smartcode_project:default project_id=150499 project_image_fid=370900]

The architecture, designed by <a href="https://www.apartments.com.au/architects/ida-design-group">IDA Design Group</a>'s Michael Trinh, draws from the natural erosion patterns of <a href="https://www.apartments.com.au/developments/cronulla-nsw-2230">Cronulla</a>'s sandstone headlands, translating the organic forms of the coastline into soft curves, pavilion-style massing, and a material palette chosen for longevity in a salt-tinged environment.&nbsp;

Textured natural stone, soft renders, and timber-look battens reference the tones of the surrounding cliffs, while the building has been oriented to maximise natural light and passive ventilation, with primary living spaces facing north and east to capture morning sun and sea breezes.

"At Solis, our aim was to create architecture that feels quietly confident, grounded in natural materials like stone and timber, and elevated by light and landscape," Trinh says.&nbsp;

"The buildings are designed to sit gently within their coastal surrounds, with expansive glazing and abundant greenery creating a seamless dialogue between inside and out."

[smartcode_project:default project_id=150499 project_image_fid=370897]

Interiors by <a href="https://www.apartments.com.au/architects/hot-black">Hot Black</a> carry the same material language through to every room. Kitchens feature integrated Gaggenau appliances, sculpted stone benchtops, and Lo &amp; Co joinery, while bathrooms feature natural stone, timber, and brushed metal finishes.&nbsp;

Hot Black Founder and Design Director Sophie Safrin describes the intent as one of considered restraint: "At Solis, every detail has been thoughtfully considered to create a timeless coastal retreat, calm, refined, and effortlessly liveable. From natural finishes to seamless indoor-outdoor flow, Solis offers a quiet elegance that's deeply connected to its surroundings.

The landscape, designed by Julian Brady of <a href="https://www.apartments.com.au/landscape-architect/sitedesignstudios">Site Design Studios</a>, treats green space as an integral part of the resident experience rather than an afterthought.&nbsp;

"Gentle curves and layered native plantings mirror the ebb and flow of the ocean," Julian Brady says, "creating a serene connection between architecture and place."&nbsp;

Coco Republic has provided bespoke furniture packages tailored to the project's coastal palette.

[smartcode_project:default project_id=150499 project_image_fid=370899]

Skymark has an established track record in the Sutherland Shire, with a portfolio spanning Cronulla, Woolooware and Burraneer that includes Isla, Sylva, Bask, Shells, Sula and Mist. Securing LDI on Solis reflects a broader shift in how the developer is positioning its buildings to buyers, at a time when Resilience Insurance expects the policy to become mandatory in New South Wales by 2028.

Sales at Solis are launching soon through Ray White Projects, with an official event scheduled for 11 June. Enquire for more information.

[smartcode_project_cta:default project_id=150499]

Skymark takes out 10-year Resilience Insurance LDI at Solis Cronulla

Oversupply

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Despite the surge in prices in Sydney and Melbourne and the high indebtedness of Australian households, Aberdeen Asset Management said there was no housing bubble.
They initially said there was no housing bubble in 2015 and re-affirmed this view in a new research paper.
It was written by its Asia Pacific head of property research, Milan Khatri.
<div>
"We don't believe that the Australian housing market is in a bubble, " Mr Khatri wrote.
"The usual features of bubble-type behaviour such as broad synchronisation of price gains across a country, lax bank lending policies, reduced scrutiny of end-buyers, and indiscriminate investor buying, mostly appear missing.
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<div>"Moreover, while housing supply is high by historic standards it is far from being excessive, and appears to have already peaked.</div>
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<div>"Certainly there may be pockets of the market where the dangers of oversupply are a real threat – such as CBD apartments – but any weakness is likely to be short-term in nature as new supply eventually falls back," he said.</div>
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<div>However Aberdeen does view house prices as being broadly overvalued close to 10 per cent with "low interest rates no doubt help[ing] to support current valuations".</div>
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The Fairfax Media report noted Khatri said Aberdeen did not believe the Australian market was overheated in the same way that markets like the US, Ireland and Spain were prior to the global financial crisis.
</div>
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Among the features that differentiated it from these markets were measures by authorities to prevent excessive lending on "loose terms"  through the restriction of high-risk loans like interest-only loans and reducing the pace of growth in investor lending to 10 per cent per annum.
He added that big price gains in Sydney and Melbourne reflected housing demand running ahead of supply while in other markets where price growth has been less pronounced supply and demand have been more in balance "with the exception of Brisbane".
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Pockets of dangerous oversupply, but no housing bubble: Aberdeen

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Brisbane’s apartment market will see a flood of newly built units over the next 12 months, putting pressure on the city’s apartment vendors and confirming the Reserve Bank’s fears.
Unit supply in greater Brisbane is scheduled to grow by 20 per cent over the next two years, with 39,420 apartments and townhouses hitting the market, according to property analytics firm CoreLogic.
Of this, there will be 15,650 additions over the next 12 months.
Valuation firm Herron Todd White’s senior executive Gavin Hulcombe said that in some extreme cases there were resales up to 30 per cent less than the off-the-plan price. 
“What we are seeing is some of the secondary, lesser designed, lesser built apartments are not seeing price growth,” he was cited as saying by The Australian.
Forecaster BIS Oxford Economics has already tipped price falls for units of 7 per cent between now and 2020 — 14 per cent in real terms. 
Latest figures from the Real Estate Institute of Queensland show an overall decline of of 2.3 per cent in the average price of apartments in the June quarter.
However, Urbis recently tipped that the Brisbane apartment market has been self-correcting and unlikely to suffer any great supply-demand imbalance. 
Fly-in, fly-out worker Rebecca Tavo, 34, has just listed her one-bedroom, one-bathroom, one-car unit in inner-city Teneriffe for sale on Gumtree, with hopes of a $450,000 sale. After owning the apartment for about eight years, the mine worker and sportswoman expects to get her money back and return to Western ­Australia.
“I don’t have any qualms I will sell it, it will just be at what price,” she said. 
To woo buyers, developers are offering discounts, rental guarantees and furniture packages.
There is a backlog of more than 2,200 units — about two years of supply — still awaiting to be sold in some projects.
Marketers for The Marc Apartments in inner-city Kangaroo Point are knocking $5,000 off the price as well as offering $15,000 furniture packages, free blinds and a one-year rental guarantee on two-bedroom units for buyers who sign up before September end.
PPB Advisory head of real ­estate Garry McLean said this quarter would give a better idea about where the market was headed.
“We are hearing mostly positive stories,” he said. “Most of the settlements that have occurred have gone reasonable well, though it is certainly slower in the tail end.”
He said the “massive surge” in supply followed a long period post-GFC when little was built.
“I would expect there to be some price reduction but, again, we are seeing the rental market holding well and we’re not seeing significant unoccupied apartments coming through,” he said.
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jonathanchancellor-7SQnKwU6yx

Brisbane faced with prospect of apartment oversupply as new units flood market

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Australia's robust housing market helped the economy weather the effects from the transition away from mining, according to the CoreLogic-Moody’s Analytics Australian Home Value Index Forecast, 2017Q1.
The report said growth in mining exports should support a housing recovery in Perth and Darwin with potential apartment oversupply in Sydney and Melbourne.
"Sydney and Melbourne are leading the market thanks to their stable local economies, although a large number of apartments completed in those cities could create oversupply issues," it said.
"Housing market strength is prompting the RBA, which lowered the overnight cash rate by 50 basis points in 2016, to keep rates steady.
Although the official monetary policy rate will remain on hold, this does not mean that mortgage rates will also stay low.
"The major banks have increased lending rates out of step with the central bank. Some of this action is being driven by regulatory tightening and will encourage a slowdown in market activity this year and next."
 
<a href="https://www.propertyobserver.com.au/images/2017/04/10/Screen%20Shot%202017-04-10%20at%2011.42.25%20AM.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/04/10/Screen%20Shot%202017-04-10%20at%2011.42.25%20AM.png" alt="">
 
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Growth in mining exports should support a housing recovery in Perth, Darwin: Moody's

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GUEST OBSERVATION
Melbourne is more likely to face an undersupply of new apartments rather than an over-supply due to its rapidly growing population.
Melbourne is the fastest growing city in Australia and projected to be the nation’s first city to reach a population of eight million.
Many proposed apartment developments in Melbourne will never get off the ground, while some developers are acquiring permits for apartments but have no intention to build, massively inflating the number of approvals.
It’s easy to think that with all the apartment construction currently underway in Melbourne that the city is undergoing an apartment over-supply, but Melbourne will not be seeing an apartment over-supply crisis anytime soon.
The Commonwealth Bank of Australia revealed that more than 140,000 apartments were approved across Melbourne, with only 35,000 expected to be completed between 2016-2018.
These figures suggest that an under-supply of high rise apartments in the future is more likely than an apartment over-supply.
Another important reason Melbourne does not have an apartment over-supply is down to the number of new developments that are failing to start. This is due to stricter lending policies and developers finding it tougher to be approved for finance, especially if they have little or no experience. There is now a greater demand from young professionals, smaller families as well as retirees looking to downsize and live in new apartments, particularly larger and high quality apartments.
Apartments are generally more affordable and tend to be well located close to amenities, transport and schools, creating plenty of lifestyle appeal.
If Melbourne wants to continue to be recognised as the world’s most liveable city, which it has been awarded six years in a row by the Economist Intelligence Unit’s liveability survey, then it needs to continue to build quality apartment developments.
Mark Mendel is CEO of<a href="https://www.ibuynew.com.au" target="_blank"> iBuyNew Group Limited</a>
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Melbourne likely to face an apartment undersupply: Mark Mendel

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Forecaster BIS Shrapnel this week used apartment oversupply as part of the justification for predicting (minor) price decline in some of our major cities over the next three years.
While I certainly share their concerns about over-building of high-rise apartments, I don’t agree that this means prices generally will fall in those cities.
Does a unit over-supply in inner-city Adelaide or Brisbane prevent house prices from growing in housing markets in the middle-ring and outer suburbs?
On the Gold Coast, past oversupply has resulted in key locations like Surfers Paradise having pricing levels lower than 10 years ago. But it hasn’t prevented inland housing suburbs from delivering price growth averaging 4-5 percent per year over the past decade.
So I expect price growth in housing markets in Brisbane, Adelaide, Canberra and Hobart – as well as the Gold Coast – regardless of the over-supply issue in the high-rise areas of those cities. I’m not expecting much from Sydney or Melbourne in the next few years, because those markets have passed their peaks and sales levels have fallen away dramatically, leading to price stagnation or minor decline.
The unit oversupply is a separate issue – and a serious one. It’s significant that lenders are including high-rise areas on blacklists, that developers are deferring planned projects and that vacancy rates are rising in key areas.
This week I updated vacancy rates for Brisbane inner-city suburbs for a seminar presentation. There has been a market blow-out in vacancies in all six suburbs I reference in that presentation. Most now have vacancies in the 5-6 percent range, according to SQM Research figures. 
In the space of three months, the vacancy rate for the Brisbane CBD has increased from 4.4 percent to 5 percent, while Woolloongabba is up from 4.8 to 5.5 percent and New Farm has increased from 5.3 to 6.1 percent.
These statistics will worsen as projects now under construction are completed and their apartments join the rental pool – because very few of the sales are being made to owner-occupiers.
Apartment markets with current or looming surpluses of stock make up half of the 10 markets highlighted in my No Go Zones report (the only half being regional areas impacted by the resources sector).
This really is one of the core issues facing the property industry. While the developer lobby keeps running the party line about dwelling shortages – despite two years of record building approvals pumped up by apartment projects – the big issue is the opposite problem of surplus.
It’s inevitable that, in some markets, vacancies will rise, rents will fall and values will be impacted.
As BIS Shrapnel senior director Angie Zigomanis says: “Nearly all capital cities are building apartments at record rates on the back of the recent strength in investor demand. As these projects are progressively completed, it is likely that there will not be enough tenants in a number of cities to support rents and consequently values upon completion.”
I’m amazed at how many people are still buying apartments in Surfers Paradise, inner-city Melbourne and inner-city Brisbane, and by the number of new projects seeking approval in oversupplied markets like Perth, Brisbane and Melbourne.
Across the key high-rise suburbs of the Gold Coast, Melbourne and Brisbane, 8,242 people have bought apartments in the past 12 months, including 1,588 in Surfers Paradise and 1,501 in the Melbourne CBD. 
Do these people not read? Don’t they have access to the Internet? The warnings from analysts, commentators, lenders and the Reserve Bank over the past 12-18 months add up to a deafening roar.
If you’re ignoring all that and still buying high-rise units off-the-plan in these markets - or if you’re oblivious to it because you haven’t done even the most basic research - you deserve to lose money.
 
Terry Ryder is the founder of hotspotting.com.au
<a href="mailto:hotspotting@gmail.com">hotspotting@gmail.com</a>
twitter.com/hotspotting
 
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terryryder-YECXbqmri2

Apartment over-building doesn't mean prices will fall: Terry Ryder

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Aussie John Symond has said not to panic with the talk of apartment oversupply across Australia.
Speaking to 2GB broadcaster Ross Greenwood, Symond suggested that a purchase in the current market needs to be well thought out.
"I'm saying not to panic.
"If you were a buyer you're going to win out, in terms of if you're after an apartment to buy, but you're really going to have to do your homework," he said.
"Some areas will be impacted and prices will be softer, or lower in certain areas and not other areas.
'"My suggestion is don't buy until you do all your homework, seek independent advice then go and talk to a broker to make sure you get the right home loan," he added.
In reply to the restricted lending criteria which may see a 30 percent deposit required to buy an apartment in a block higher than six levels, he said it's been a long time coming.
"It's been a long time coming with the potential of oversupply of apartments.
"But we've got to remember it's (the oversupply) in different areas so you've got to be careful."
He said that there might be an opportunity to buy an apartment for a significant discount.
"You might get up to 20 percent under where values were a year ago.
"It's unfortunate if you're locked in and you've already paid the deposit, you're taking that risk, but if you're coming in looking for an investment or home to live in, you're going to be able to buy much much better than you would have a year ago."
He did have a warning for investors however.
"You've got to remember, if you're buying to rent, those are oversupplied areas you'll find it much more difficult to find a tenant and you've got to be prepared to have it empty for some time or take a substantial discount on the first year or two with the rent you'll get.
On comments made about the market doing well, Symond suggested that he thinks investors are probably spurred on a bit.
"Not just with the lower interest rates but the fear if Labor was to get in and hit existing properties on the head in terms of negative gearing going forward.
"Labor said that they will grandfathers those so you do have some people saying I better get in because i need to get the negative gearing to make the investment work for me," he said.
"So i think there's a combination of reasons why the market is still bubbling along quite healthily."
Symond also suggested that Harry Triguboff, who topped the rich list for 2016, has done an amazing job.
"I think Harry's in the great position where if he can't sell them he keeps them and rents them out." 
To listen to the interview in full <a href="https://www.2gb.com/article/john-symond-31-may-2016" target="_blank">click here.</a>
 
 
 
 
 
 
 
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John Symond suggests there's no need to panic in the current apartment oversupply

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GUEST OBSERVER
News of Macquarie Bank tightening its loan to value ratio (LVR) for apartment high-rises has sparked fears of an oversupply in certain markets.
The bank named 46 postcodes where high-rise apartment lending would shrink to 70 percent of the value of the property.
The problem in these postcodes – which are concentrated in inner Sydney, Melbourne and Brisbane – is not one of supply and demand, at least not in the sense that there are more apartments than there are people to live in them. Supply and demand in these markets is not a question of how many people need a place to live versus how many places there are to live. Rather it is how many owner-occupiers and investors demand assets.
The former conception of supply and demand ignores the tax and finance incentives that encourage people to hold more property than they need to live in. These incentives include cash-free equity deposits, negative gearing and capital gains concessions, which have been introduced one by one into the housing market over the last 30 years. It makes sense then, that our understanding of supply and demand in real estate should be dynamic. As long as there is an investor looking for a property to put their money in, there is demand. As long as there is an investor demanding property, a developer is willing to supply.
Professor Laurence Murphy of the University of Auckland notes that when the price of property begins to fall, developers become less willing to supply dwellings. Graph 1 and 2 compares high-rise approval data in Victoria and NSW (which we have to assume is a proxy for inner city unit development) with quarterly growth rates in their respective unit markets.
Graph 1: Quarterly Approval Figures Victoria vs. Melbourne Units Quarterly Growth Rates
<a href="/images/2016/06/01/Graph_1.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2016/06/01/Graph_1.jpg" alt="">
Source: Residex
Graph 2: Quarterly Approval Figures NSW vs. Sydney Units Quarterly Growth Rates
<a href="/images/2016/06/01/Graph_2.jpg" target="_blank">Click to enlarge</a> <img src="/images/2016/06/01/Graph_2.jpg" alt="">
Source: Residex
The graphs show that approvals are highly responsive to changes in unit growth rates.
As demand for units falls away due to tighter LVRs, slowed wage growth and higher premiums on foreign investment purchases<a href="https://www.blog.residex.com.au.tmp.anchor.net.au/2016/05/26/may-market-update/?utm_source=membersNewsletter&amp;utm_medium=email&amp;utm_campaign=Cid=ResiMay16&amp;mc_cid=d432d199da&amp;mc_eid=1c64ff30b3#footnote-1">[1]</a>, the first thing to crash will most likely be applications and construction of dwellings. This has wider economic implications, particularly for NSW and VIC, where construction has been a significant contributor to growth in gross state product.
The construction of units – whether in the application phase, construction phase or completion phase – moves in much larger fluctuations than the values of the units themselves. For example, in the September quarter of 2010, the number of approvals for units in blocks of four or more stories grew by 124% in NSW, yet nothing dramatic happened with Sydney unit value growth. Values grew steadily until 2013 when they began to grow at a higher rate. I am not saying that the supply of units to speculative investors is sustainable where population growth is low, nor is it optimal for the people living in them. However, it is clear that price movements and investor interest in units are a better indicator of expected supply movements than population growth rates.
The graphs also show the approval figures for other dwelling types over the past decade. Most strikingly, the number of high-rise units began outperforming detached housing approvals from March 2011. The salience of this phenomenon increased around the beginning of the 2013 housing boom.
Less important than the effect of supply on the value of a unit is the way units are supplied and how they are integrated with wider planning. Residential dwellings crowding out commercial and cultural facilities, which are partly what makes a city desirable in the first place, can limit a city’s desirability. A lack of diverse planning can also increase pressure on transport and road congestion. This is one of the many risks of investing in rapid high-rise growth areas, and has caused some young families and retirees to move to regional parts of the state.
Eliza Owen is housing market analyst for onthehouse.com.au and can be contacted <a href="https://www.onthehouse.com.au" target="_blank">here</a>.
 
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Oversupply fears rise as LVRs drop: Eliza Owen

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The buzz around an oversupply of new apartments in Australia is exaggerated as many of the proposed developments will never eventuate because of financing problems, says online property agency iBuyNew, which specialises in off-the-plan properties.
Chief executive of iBuyNew, Mark Mendel, said many developers with approvals in place for apartment complexes will not complete the project because they are unable to obtain finance.
“While there is a lot discussion about banks toughening their lending policies for buyers, they are even tougher on developers,” Mendel said.
“Developers with no track record are getting a blanket ‘no’ from lenders across the board, while those with a limited track record are also finding it extremely tough.”
Mendel said the generalisation that Australia had an oversupply of apartments was too simple and one needed to look at the specifics of each state, region and suburb.
“There are definitely pockets of Brisbane, Melbourne and Sydney that may experience an oversupply of apartments.
‘But if you look at Zetland/Waterloo in Sydney’s inner south where thousands of new apartments have been built over the last five years, everyone expected an oversupply but capital growth has still been more than 10 per cent in the last 12 months.”
Mendel said South East Queensland was going through a massive transformation.
“This is becoming an international region with infrastructure developments such as the new $2 billion casino in Brisbane as well as the Gold Coast hosting the Commonwealth Games in 2018,” he said.
According to Mendel, the infrastructure boom will change the way the world sees Brisbane and South East Queensland in future. 
 
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Apartment oversupply overstated as many projects won't take off due to lack of financing: iBuyNew CEO

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Does Australia have a greater housing oversupply than the US? Pete Wargent

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As reported in the media recently, forecaster BIS Shrapnel is holding firm to a view they’ve had for a while – by 2017, every city excluding Sydney will have a significant oversupply of apartments; and it will probably be worst in inner Melbourne and inner Brisbane. 
Oversupplies happen after a boom. Time and time again, they happen, says property expert John McGrath in his latest Switzer blog. 
During a boom when the market is hot, developers race to acquire land, lodge building applications, prepare sites and build apartments – and increasingly, high rise apartments. But construction takes time so inevitably, when a boom ends, there is an overhang of new supply yet to hit the market when demand is beginning to wane. 
"In an oversupplied market, values tend to fall a bit. There’s not enough demand to meet the extra supply. What this means for buyers is they finally get the upper hand and it’s my advice to use it!" he says.
According to him, a very specific group of buyers can benefit from oversupplied markets. Those buying for owner-occupation with a view to holding the home for the long term; and to a lesser extent investors, as long as they are in a position to cope with high vacancy rates for a while. This might include couples who want to downsize to a luxury apartment in the city at a future date. 
For these two groups, as long as one is buying in a good location with a history of strong demand, and also looking to hold the property for the long-term, a buyer can do really well purchasing in an oversupplied market. 
Oversupplied markets give buyers lots of choice and flexibility with negotiating, says McGrath.
"The trick is, once you’ve bought well, you need to be able to ride out the oversupply and wait for the market to re-balance through population growth. You need to be prepared for gloomy media reports of potential price falls. You might, in fact, experience a decline in your home’s value but this is likely to be short term for good quality properties in desirable areas.
"While owner-occupiers can use oversupplied markets to their advantage, investors do need to be more cautious. It might be difficult to rent your property out when there are many other options for renters. The best thing you can do is buy a property with some special features that separate it from the pack – such as a larger floor plan, great fixtures and fittings, double parking, a north facing aspect and so on, to ensure you get consistency of tenancy during the oversupply. 
"Also, if you’re looking to buy and access equity in the near future to purchase again, then buying in an oversupplied market might not be a good idea because price growth is going to take a while. If you’re just looking to buy a home, live there and not do much else in property, then buying in an oversupplied market could be a phenomenal opportunity."
Latest estimates published in April 2015 by Infrastructure Australia show expectations of strong population growth concentrated in our capital cities. Nationally, we’re predicted to grow from 22.3 million in 2011 to 30.5 million in 2031. The four largest cities – Sydney, Melbourne, Brisbane and Perth are projected to grow by 5.8 million (or around 45%) from 12.8 million in 2011 to 18.6 million in 2031. 
The BIS report predicts new dwelling commencements to peak this quarter at around 221,000 but when you take into account impending population growth over the next 15 years, it’s a green light for buyers looking to take advantage of oversupply prices next year, he says in conclusion.
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