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


Joel Robinson

Maréa Residences brings parkside apartments to Coolangatta

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


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

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


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

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


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

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


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

Pete Wargent

<html><body>
<p>Expert Observer</p>

<p>As we previously projected, the housing market has shifted from a buyer’s market to a seller’s one, where fear of missing out (FOMO) has become a major factor. In addition, it is highly likely that the ultra-low interest rate environment will remain in place for at least for the next 24 months, and possibly longer. </p>

<p>This, combined with only a low availability of stock of quality assets in popular areas, has been reflected in almost unprecedented auction clearance rates.  </p>

<p>Buyer’s agents have been reporting tight stock levels all over the country. </p>

<p>It’s not uncommon to see lower stock levels over the summer break, but this year has been something else. Even as new listings have begun to pick up supply is being comfortably outstripped by demand and the market overall is very tight.</p>

<p>Melbourne presents a slightly different dynamic, with various disruptions making the market more disjointed, but in most parts of the country open homes are busy as confidence returns, and strong sales results are being reported in short order.</p>

<p>Market dynamics confirmed earlier forecasts of strong price growth in 2021, with some markets likely to even better than previously forecast. </p>

<p>It is projected that both Sydney and Melbourne will deliver capital growth in the range of 8-12 per cent in 2021. Many areas are also likely to deliver double digit growth over the calendar year. In particular, houses with a high land value component and scarcity value are likely to enjoy very strong demand and capital growth, both in the short and long term. </p>

<p>Other markets, particularly south-east Queensland and popular regional areas that offer particularly good lifestyle choices, also enjoy strong demand, and this is likely to result in strong price growth both in the short- and long-term, as the trend of increased popularity of such areas is sustained. </p>

<p>The medium- and long-term projections for South Australia, Western Australia, and the Northern Territory, are different than those that are projected to the eastern states. While many other areas that experience lower population growth and softer job market (in comparison to Sydney and Melbourne), such as Perth, are also experiencing strong capital growth for houses, this is less sustainable over the long term, due to lower external migration and a relatively smaller number of high paying jobs in the ‘knowledge industry’ (e.g., financial services, IT, etc).  </p>

<p>Obviously, these are under our key underlying assumption is that the COVID-19 vaccinations that have been rolled out will provide a sustainable solution to the virus over time. </p>

<p>Rental apartments, however, continue to represent a higher risk at the present time, in particular inner-city apartment markets such as Inner-Melbourne.  </p>

<p>Consumer sentiment is very high, as expected. According to Westpac-Melbourne Institute, in February, Westpac’s key measure of house price expectations has risen strongly to 154.7 from 117.3 in October. All states have registered impressive recoveries. </p>

<p>House price expectations are already being reflected in auction clearance rates figures, especially in Melbourne. Preliminary auction clearance rates in the last week of January showed results of 83 per cent in Melbourne and 83 per cent in Sydney, with noticeably higher auction clearance rates for houses than units. Clearance rates across the country are likely to remain high and similar to pre-pandemic Levels and well above the 70 per cent mark. </p>

<p>A sustained period of ultra-low interest rates seems almost certain in the foreseeable future. This has led some lenders to offer introductory home loan variable rates of 1.79 per cent, a move which follows the launch of the first fixed rates of 1.75 per cent. Consequently, this has led to an increase in housing finance.  </p>

<p>The latest ABS data on new housing lending showed a record 31.2 per cent year-on-year rise, driven by a surge in owner-occupier lending (which includes a large increase in construction loans) as well as a smaller rise in investment lending. The value of new owner occupier home loan commitments increased by 8.7 per cent to $19.9 billion in December 2020 and the value of investor loan commitments was also up 10.9 per cent to $6.07 billion. </p>

<p>First home buyer activity is also well above the benchmark, up 56.6 per cent year-on-year. However, the share of owner-occupier activity is likely to reduce with an expected increase in investor activity. </p>

<p>A further increase in housing finance is highly likely during the first quarter of 2021 with many lenders already experiencing backlogs to address loan pre-approval applications. Ultra-low interest rates are also likely to have a positive impact on the market during 2021 and 2022. </p>

<p>Lifestyle areas enjoyed strong demand before COVID-19 hit, and the demand trend of sea- and treechange homebuyers is now, with flexible working arrangements, even stronger. Those who work in a stable corporate environment, but do so remotely, are taking advantage of great buying opportunities in NSW, Victoria, and south-east Queensland. </p>

<p>These include areas of south-east Queensland such as the Sunshine Coast and the Gold Coast, just over the NSW border in Byron Bay, and further south on the Central Coast, in areas such as North Avoca, Terrigal, and Wamberal. Then, there are also sought-after locations such as the Hunter Valley, Wollongong, and the NSW South Coast, and in Victoria, the Mornington Peninsula, Geelong, and Ballarat. Beachside suburbs especially are outperforming the wider market as they offer fantastic lifestyle opportunities. The ability to work remotely and to move to regional areas also has been a contributing factor in supporting housing affordability, as the pressure in capital cities will be somewhat mitigated. </p>

<p>Due to ultra-low interest rates, the housing market is reaching new highs with further price increases projected. Consequently, this will make dwellings less affordable when including the required deposit and closing costs. While internal migration to regional areas somewhat mitigates the problem, there is still a major undersupply of family suitable properties in popular areas with proximity to the major employment hubs. </p>

<p>High-rise apartments are not considered to be a fully substitutable product to houses and townhouses, and therefore will not materially impact the demand for houses. Housing affordability is likely to remain a chronic issue particularly in Greater Sydney, Greater Melbourne as well as popular areas in south-east Queensland. </p>

<p>However, it is likely that strong price increases will encourage APRA to watch the housing market closely, particularly given record low interest rates, high household debt, and signs of some revival in borrowing for speculative purposes. It should be noted that strong investor activity is perceived by the RBA as ‘speculation’ that increases the risks to financial stability. Consequently, any major increase in investor activity is likely to trigger the reintroduction of macroprudential measures by APRA, at a certain point in time. </p>

<p>Population growth, as projected, has been reduced substantially and there will be significant reduction in total population growth due to low external migration, with Net Overseas Migration (NOM) in FY21 is expected to drop to -71,600 people, for Australia's first experience of negative NOM since 1946. This negative trend is forecast to continue in FY22 and only gradually return to pre-COVID levels from FY23 onwards. The reduction in overseas migration has and will continue to have a major impact on rental apartments that have already experienced increased vacancy rates and lower demand from investors. </p>

<p>In the immediate term, there are higher risks in the rental apartment segment, that are likely to result in price reductions across the country, particularly in heavily supplied areas in Melbourne, and to a lesser extent in Sydney. These markets may be more volatile due to the high proportion of property investors and high levels of external migration. There is a renewed interest in the high risk off-the-plan units, due to generous government concessions and the perceived opportunity to buy at, allegedly, low prices. </p>

<p>However, off-the-plan units carry a high level of risk mainly as buyers, including property investors, shift demand towards detached houses. Uncertainty in relation to external migration further increases the risk. </p>

<p>The unit rental market overall remains relatively weak. The decline in unit rents was largely concentrated around the inner-city markets of Melbourne and Sydney, contributing to a city-wide drop of 7.6 per cent and 5.7 per cent respectively over the year. Unit rents also fell 4.6 per cent across the combined capital city unit market. </p>

<p>This increases serviceability risk (particularly in the short term) due to the combination of continued high supply of units, preference for houses in capital cities and regional areas, and uncertainty related to the rental demand largely driven by young renters and migrants.  </p>

<p>Serviceability risk already has and will continue to have a significant impact on investor demand for high-rise units, as investors are very responsive to out-of-pocket expenses. </p>

<p>Therefore, both equity risk and cash flow risk for rental apartments, remain relatively high.</p>

<p>Pete Wargent </p>
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The housing market has shifted from a buyer’s market to a seller’s one, where fear of missing out (FOMO) has become a major factor

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Ultra-low interest rates and 'FOMO' drive dwelling values to new highs with double-digit growth on the horizon: Pete Wargent

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<p>Reserve Bank assets have continued to increase to $319 billion as at mid-December. </p>

<p>But as money growth scaled fresh cycle highs of 12.4 per cent in November, credit growth continued to slump to new cycle lows of just 1.7 per cent. </p>

<figure><a class="colorbox colorbox-insert-image" href="https://res.cloudinary.com/dz9xllyip/image/fetch/q_auto:good/https://s3-ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/pictures/article-images/credit_v_money_warg_1.jpg" rel="gallery-all"><img alt="" class="image-article-full-width-580px" height="331" src="/s3/files/styles/article_full_width_580px/public/pictures/article-images/credit_v_money_warg_1.jpg?itok=9hlONLhn" width="580"></a></figure><p>Business credit growth was negative again in November, as it was in October, and there's been little need for personal credit to grow lately as stimulus (in fact personal credit growth has crashed deeply into negative territory this year). </p>

<p>Housing credit growth continued to move up to a 17-month high, but overall will be more modest in this cycle with interest-only loans outstanding having been crunched lower from $580 billion to around $260 billion. </p>

<p>To date the growth has been all about owner-occupiers, with this cohort recording +5.4 per cent credit growth over the year to November 2020. </p>

<p>The housing credit impulse already points to higher housing prices in the first quarter of 2021. </p>

<p>With enquiries from investors suddenly jumping in December housing credit growth will likely rise further, in turn igniting double digit gains for property prices (base case).</p>
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As money growth scaled fresh cycle highs of 12.4 per cent in November, credit growth continued to slump to new cycle lows of just 1.7 per cent. 

Credit growth slumps to new cycle lows: Pete Wargent

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<p>The lower dollar continues to work away on Arrivals and Departure trends, with a further +1.8 per cent seasonally adjusted increase in the number of short term arrivals in November, and a -2.8 per cent decrease in the equivalent number of departures.  </p>
<p>The monthly ratio of short term departures this continues to decline, which will act as a twin boost for the domestic economy.</p>
<p><img class="aligncenter img-responsive" src="https://2.bp.blogspot.com/-b73svb4ZFPU/VpUnsI93FyI/AAAAAAAAak0/7_yWcorhIAA/s640/A2.jpg" alt="" width="640" height="320"></p>
<p>The labour market is not presently strong enough to warrant the exceedingly high level of net permanent and long term immigration seen in 2013 of above 400,000.</p>
<p>The rolling annual figure is now seemingly getting set to stabilise – in November the rolling annual total ticked down slightly from 278,200 to 277,600, with the decline being felt most keenly in the resources states and the regions, as opposed to the largest capital cities.</p>
<p> </p>
<p><img class="aligncenter img-responsive" src="https://3.bp.blogspot.com/-O7WpgUtq3xE/VpUnsHJlouI/AAAAAAAAaks/zY07p-aR25M/s640/A1.jpg" alt="" width="640" height="322"></p>
<p> </p>
<p>The most recent <a href="https://petewargent.blogspot.sg/2015/12/students-to-drive-population" target="_blank">forecasts</a> from the Department of Immigration &amp; Border Protection (DIBP) show that the population growth rebound for the remainder of this decade will be driven by international students rather than by immigrants on 457 or permanent resident visas.</p>
<h4>RECORD CHINESE TOURISM</h4>
<p>The annual number of short term arrivals into Australia surged to a new record high of 7.36 million in November.</p>
<p>There have been significant increases in the number of visitors from India (+19 per cent) and the United States (+9 per cent) over the past year, Americans doubtless encouraged by favourable shifts in the exchange rate.</p>
<p>There can no doubting the key trend here, however, which has been the vast +17 per cent increase in the number of visitors from China, Hong Kong and Taiwan to 1.36 million.</p>
<p>The pace and scale of the increase over the past decade has been breathtaking, as documented regularly on this blog.</p>
<p> </p>
<p><img class="aligncenter img-responsive" src="https://4.bp.blogspot.com/-7I2RT3jAbrU/VpUns-kh5eI/AAAAAAAAak4/zg5drP4jalk/s640/A4.jpg" alt="" width="640" height="328"></p>
<p>For the first time China alone accounted for more than 1 million visitors in the year to November, and make no mistake, Chinese tourists spend up big when they come to Australia.</p>
<h4>STUDENTS</h4>
<p>A record 3.38 million persons came to Australia for a holiday over the year, while for the first time this year more than 2 million cited there reason for journey as “visiting friends and relatives”, reflective of Australia’s status as a country built on immigration.</p>
<p> </p>
<p><img class="aligncenter img-responsive" src="https://4.bp.blogspot.com/-Z1Fex7hVrZI/VpUnsNsACqI/AAAAAAAAakw/40K-WQd6p_0/s640/A3.jpg" alt="" width="640" height="326"></p>
<p> </p>
<p>The other key trend to watch this year is the explosion in the number of international students, not least because following a streamlining of the acceptance rules so many are expected to go on to become permanent residents on other visas.</p>
<p>This data series confirmed that the rolling annual number of education arrivals jumped by an unprecedented +71,200 or +18 per cent to 464,600 in the year to November.</p>
<p> </p>
<p><img class="aligncenter img-responsive" src="https://3.bp.blogspot.com/-ZSAHnIJp5Ec/VpUns7Fo29I/AAAAAAAAak8/Bhsg-ejlFSg/s640/A5.jpg" alt="" width="640" height="312"></p>
<p> </p>
<p>Most students are projected to be accepted into the large capital cities.</p>
<p><span>Pete Wargent is the co-founder of AllenWargent property buyers (London, Sydney) and a best-selling author and blogger.</span></p>
<p> </p>
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How the dollar is driving demographic trends for property investors: Pete Wargent

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<div>There has been a lot of misleading commentary about population growth dropping off a cliff, and so on.</div>
<div> </div>
<div>It really isn't, but the composition of growth is sure changing.</div>
<div> </div>
<div>I explained <a href="https://petewargent.blogspot.co.uk/2015/12/students-to-drive-population" target="_blank">here</a> back in 2015 why international students would be the key driver of growth going forward.<br><br> It's a key reason why so many bloggers and analysts got their supply and demand ratios so muddled last year, particularly in Melbourne where <a href="https://petewargent.blogspot.co.uk/2016/12/melbournes-population-explosion" target="_blank">population growth broke all known records in 2016</a>, but also in Sydney, and to a much lesser extent Brisbane. </div>
<div> </div>
<div>The latest figures from the DIBP confirmed a walloping increase of 90,380 temporary visa holders over the year to September 2016, with a crunching increase in student visa holders of 45,070 over the year.</div>
<div> </div>
<div>Remember many international students are expected to go to secure Australian residency through other visa classes.</div>
<div> </div>
<div>There was also a massive 51.4 per cent increase in temporary graduate visa holders, easily eclipsing the relatively small decline in skilled 457 visas (that form the basis of most doomsday scenarios).</div>
<div> </div>
<div><a href="https://3.bp.blogspot.com/-lK4sTHM0uYs/WHdgU0fcoSI/AAAAAAAAhM0/GyXPi2QtKwIIQYK41p-R605PYMtqVcG5QCLcB/s640/V1.jpg" target="_blank">Click to enlarge</a></div>
<p><a href="https://3.bp.blogspot.com/-lK4sTHM0uYs/WHdgU0fcoSI/AAAAAAAAhM0/GyXPi2QtKwIIQYK41p-R605PYMtqVcG5QCLcB/s1600/V1.jpg"><img src="https://3.bp.blogspot.com/-lK4sTHM0uYs/WHdgU0fcoSI/AAAAAAAAhM0/GyXPi2QtKwIIQYK41p-R605PYMtqVcG5QCLcB/s640/V1.jpg" width="640" height="240"></a></p>
<p>Source: DIBP</p>
<div>By far the greatest number of temporary visa holders were Kiwis on the visa subclass 444, increasing by 2.3 per cent to 677,030, dispelling the narrative that all Kiwis are heading home.<br><br> Total temporary entrants will rise towards 2.1 million by the end of 2017.</div>
<p><a href="https://1.bp.blogspot.com/-VzgXJuEpkk0/WHdgUqv7CTI/AAAAAAAAhMw/DC6WVITK2OUb1g5rEkB6izXpV9_sxBxDwCLcB/s640/V2.jpg" target="_blank">Click to enlarge</a><br><br><a href="https://1.bp.blogspot.com/-VzgXJuEpkk0/WHdgUqv7CTI/AAAAAAAAhMw/DC6WVITK2OUb1g5rEkB6izXpV9_sxBxDwCLcB/s1600/V2.jpg"><img src="https://1.bp.blogspot.com/-VzgXJuEpkk0/WHdgUqv7CTI/AAAAAAAAhMw/DC6WVITK2OUb1g5rEkB6izXpV9_sxBxDwCLcB/s640/V2.jpg" width="640" height="270"></a><br><br> Thanks to the visa subclass 444, some 34.5 per cent of temporary visa holders are New Zealanders.<br><br><a href="https://1.bp.blogspot.com/-rfnlCybJ6ME/WHdgVEXjSuI/AAAAAAAAhM4/SpZNbB3_84gsYYaz5gmVwrT8KZm2wSIHwCLcB/s640/V3.jpg" target="_blank"> Click to enlarge</a><br><br><a href="https://1.bp.blogspot.com/-rfnlCybJ6ME/WHdgVEXjSuI/AAAAAAAAhM4/SpZNbB3_84gsYYaz5gmVwrT8KZm2wSIHwCLcB/s1600/V3.jpg"><img src="https://1.bp.blogspot.com/-rfnlCybJ6ME/WHdgVEXjSuI/AAAAAAAAhM4/SpZNbB3_84gsYYaz5gmVwrT8KZm2wSIHwCLcB/s640/V3.jpg" width="640" height="296"></a><br><br> However, the real growth sector is in student visas, particularly to Chinese and Indian students.</p>
<p><a href="https://3.bp.blogspot.com/-S7kZqDb9cgU/WHdgToxuj0I/AAAAAAAAhMs/WzCBZ5Otx-IThjZwfZ_c-6tQ9aCvGp_ewCLcB/s640/STUDENT.jpg" target="_blank">Click to enlarge</a></p>
<div><a href="https://3.bp.blogspot.com/-S7kZqDb9cgU/WHdgToxuj0I/AAAAAAAAhMs/WzCBZ5Otx-IThjZwfZ_c-6tQ9aCvGp_ewCLcB/s1600/STUDENT.jpg"><img src="https://3.bp.blogspot.com/-S7kZqDb9cgU/WHdgToxuj0I/AAAAAAAAhMs/WzCBZ5Otx-IThjZwfZ_c-6tQ9aCvGp_ewCLcB/s640/STUDENT.jpg" width="640" height="298"></a></div>
<div> </div>
<div>Most international students head to institutions in Melbourne, Sydney, and Brisbane - in that order.</div>
<div> </div>
<div>As expected, the insatiable demand from international students will keep on keeping on, delivering a substantial boost for population growth in those three capital cities through 2016 and beyond.</div>
<div> </div>
<div>PETE WARGENT is the co-founder of <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blogger</a>.</div>
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Students help temporary visa holders soar towards 2 million: Pete Wargent

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<div>Wages grew by just +0.48 per cent in the September 2017 quarter, to be +2.01 per cent higher over the year.</div>
<div> </div>
<div>Superficially this looks like a bit of an improvement, and at least it can be said that wages are growing a bit ahead of the rate of inflation. Just. </div>
<p> </p>
<div class="separator"><img src="https://3.bp.blogspot.com/-IYxYl65xkt4/WgveMX_lgEI/AAAAAAAAnA4/-A3i5dGy9uMkZQ5W1_XbzOkw7fXPcJU3gCEwYBhgL/s640/W4.jpg" width="640" height="398" data-original-height="831" data-original-width="1336"></div>
<p> </p>
<div>And including bonuses the annual increase was a slightly more upbeat +0.7 per cent for the quarter, and +2.2 per cent for the year. </div>
<div> </div>
<div>However, the result this quarter was pumped up by the minimum wage increase, and you can see in the chart below that a number of industries (such as accommodation &amp; food) how this inflated the quarterly numbers. </div>
<div> </div>
<div>Over the year the industries with the most robust wage price growth included healthcare &amp; social assistance (+2.7 per cent), arts &amp; recreation services (+2.7 per cent), and education &amp; training (+2.4 per cent).</div>
<div> </div>
<div>On the other hand wages growth in the mining sector (+1.2 per cent) remains very low, as it does in professional, scientific, &amp; tech services (+1.5 per cent). </div>
<p> </p>
<div class="separator"><img src="https://3.bp.blogspot.com/-qz-oEw4ScZk/WgveKUMf7-I/AAAAAAAAnBA/i1VE8nK3RLUV97PLMfKJ4ALyFwYD8NJjACEwYBhgL/s640/Q5.jpg" width="640" height="398" data-original-height="831" data-original-width="1335"></div>
<div class="separator"> </div>
<div>Annual wage price growth in the private sector remains super-low at just +1.86 per cent, with wage price growth in the public sector some way higher at +2.37 per cent. </div>
<div> </div>
<div>The public sector index has outpaced the private sector since the peak of the resources construction boom. </div>
<div> </div>
<div class="separator"><img src="https://3.bp.blogspot.com/-AsixGPHs0-4/WgveMQ-G2WI/AAAAAAAAnA8/Sk0v0wmiKGk7QWwu0qw-Sr1NzkzLaeVSgCEwYBhgL/s640/W3.jpg" width="640" height="392" data-original-height="834" data-original-width="1361"></div>
<p><br><strong><span style="text-decoration: underline;">Resources states slow</span></strong></p>
<div><strong><span style="text-decoration: underline;"> </span></strong></div>
<div>At the state level Queensland, Victoria, and Tasmania each recorded wages growth of +2.2 per cent, while New South Wales (+2.1 per cent) also recorded reasonable growth. </div>
<div> </div>
<div>However, there were considerably weaker results in Western Australia (+1.3 per cent) and the Northern Territory (+1.4 per cent). </div>
<div> </div>
<div class="separator"><img src="https://3.bp.blogspot.com/-t5Uo7NdC0C8/WgveJMlBj1I/AAAAAAAAnAs/60BC3Bn-sUQWDuK1PRht2vH1chUljsgYQCLcBGAs/s640/W1.jpg" width="640" height="384" data-original-height="814" data-original-width="1355"></div>
<p> </p>
<div>Western Australia recorded the fastest pace of wages growth through the mining boom, but is now coming back to the pack. </div>
<p> </p>
<div class="separator"><img src="https://4.bp.blogspot.com/-ixrHpZfGI4c/WgveK1jqFYI/AAAAAAAAnA0/23c2kG7sJzY-uhNmXvXpRFndFAJm3AVawCLcBGAs/s640/W2.jpg" width="640" height="392" data-original-height="831" data-original-width="1356"></div>
<p><br><strong><span style="text-decoration: underline;">The wrap</span></strong><br><br></p>
<div>Overall, while it's positive to note annual wages growth moving a bit higher and ahead of the rate inflation, in reality this was a very soft result which missed expectations, having been puffed up by the minimum wage increase.<br><br>Not much in the way of pre-Xmas cheer to be found here! </div>
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Wages growth at snail's pace: Pete Wargent

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<p>Stamp duty isn't a much admired tax.</p>
<p>Except by governments that is!</p>
<p>The arguments against stamp and transfer duties include that they discourage labour force mobility, while making life challenging for first home buyers.</p>
<p>It's not hard to see why governments like them, though.</p>
<p>Over the year to February 2017 the NSW Office of State Revenue (OSR) alone recorded astronomical receipts of $9.4 billion.</p>
<p>Stamp duty is now accounting for more than a quarter of state government revenue in NSW.</p>
<p><a href="https://www.propertyobserver.com.au/images/2017/03/30/Chart-1.jpg" target="_blank">Click to enlarge</a></p>
<p><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/2017/03/30/Chart-1.jpg" alt=""></p>
<p>I noted last year how the NSW government has smashed its budget targets to leave itself with net debt of less than zero for the first time, largely thanks to this remarkable windfall.</p>
<p>A proposed alternative would be to put an annual tax on the unimproved value of residential land, including for the family home (there is already a land tax threshold in place, but it doesn't capture all homeowners due to an exemption on the family home).</p>
<p>The main challenge is that with residential land values in New South Wales of $1,657 billion, the annual tax would have to be quite significant to raise the equivalent $9.4 billion.</p>
<p>Recent proposals have included an annual land tax of 0.75 per cent.</p>
<p><a href="https://www.propertyobserver.com.au/images/2017/03/30/Chart-2.jpg" target="_blank">Click to enlarge</a></p>
<p><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/2017/03/30/Chart-2.jpg" alt=""></p>
<p>There are now just over 3 million dwellings in New South Wales, so another way to look at it is that households and owners of other residential dwellings may have to stump up on average $3,100 per annum to raise the equivalent amount of tax.</p>
<p><a href="https://www.propertyobserver.com.au/images/2017/03/30/Chart-3.jpg" target="_blank">Click to enlarge</a></p>
<p><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/2017/03/30/Chart-3.jpg" alt=""></p>
<p>A proposed land value tax would typically deliver comparatively little pain for those living in an apartment, since the land value content of such dwellings is relatively low.</p>
<p>On the other hand I think of the retirees on my street who now have very valuable land under their homes, for which the annual land tax bill would be impossible for them to pay.</p>
<p>So the argument goes, by taxing people on their homes they will be 'incentivised' to move somewhere smaller and more appropriate for their needs.</p>
<p>It could certainly happen over time, though it would be a brave move politically.</p>
<p class="p1"><span class="s1">PETE WARGENT is the co-founder of <a href="https://allenwargent.com/" target="_blank"><span class="s2">AllenWargent</span></a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank"><span class="s2">blogger</span></a>.</span></p>
<p class="p2"><span class="s3"><em>His latest book is </em><a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank"><span class="s2"><em>Four Green Houses and a Red Hotel</em></span></a><em>.</em></span></p>
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Stamp duty bonanza: Pete Wargent 

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<div>Figures out recently showed Australian employment growth <a href="http://petewargent.blogspot.com.au/2018/03/employment-growth-hits-all-time-high" target="_blank">tracking at all-time record levels</a>, with a stunning +420,700 year-on-year increase in employment, including an eye-watering +166,200 increase in New South Wales.<br><br>I took a look through those numbers in a bit more detail, including at the state level, <a href="http://petewargent.blogspot.com.au/2018/03/employment-growth-hits-all-time-high" target="_blank">here</a>.<br><br>Population growth tends to be pro-cyclical, and over the year to September 2017 the annual growth in Australia's estimated resident population picked up to +395,600, for the quickest annual increase since 2013 in absolute terms, if not in percentage terms.<br><br>The estimated rate of population increase through net overseas migration is a bit faster than might be implied by the issuance of permanent residency visas, with the growth international students accounting for some of the difference.<br><br>I'll take a look below through where and why that's happened in 4 short parts.<br><br><strong><span style="text-decoration: underline;">Part 1: By natural causes...</span></strong><br><br>
</div>
<div>As the population grows and ages the number of deaths each year tends to climb steadily, now up to +161,100 over the year to September 2017.<br><br>The trends for births are a bit more complicated, and often vary quite significantly around the regions of Australia and by culture.<br><br>Generally speaking, we're still having babies, but on average we opt to do it later in life than was the case over the preceding decades.<br><br>I'm not a bad case study myself for Australia's population trends, being a capital city immigrant to Sydney that worked in professional services, then mining, then real estate...before relocating to Brisbane, and leaving having children about as late as nature would allow.<br><br>I've yet to get divorced.<br><br>You might say I'm following the herd, but in fact my plan has been to be ahead of the crowd on all fronts, and indeed with the benefit of hindsight I probably got out of the mining industry a few years too soon (bubbles can have a second wind and run for <strong><span style="text-decoration: underline;">much</span></strong> longer than you think they will...but you live and learn with these things!).<br><br>Anyway, back to the demographic statistics, there was previously a bit of a blip in the births figures - the error was administrative and related to slow record-keeping rather than the number of babies actually popping out - but the backlog now seems to be fixed and total births have stabilised at around +306,500.<br><br>Thus, the natural increase in Australia's population over the year to September was +145,500, a bit lower than the +151,500 a year earlier as the number of deaths continued to increase. </div>
<div class="separator">
<a href="https://3.bp.blogspot.com/-fRHV9pfvdYw/WrMt_M5T65I/AAAAAAAApDA/JrOdDfLGYGoVNcljLVXCvGKUB3wQ4KgTACLcBGAs/s1600/C1.jpg"><img src="https://3.bp.blogspot.com/-fRHV9pfvdYw/WrMt_M5T65I/AAAAAAAApDA/JrOdDfLGYGoVNcljLVXCvGKUB3wQ4KgTACLcBGAs/s640/C1.jpg" width="640" height="394" data-original-height="824" data-original-width="1336"></a> </div>
<div>It's hard to predict what will happen here.<br><br>Certainly the number of deaths will continue to rise (that's one prediction you can hold me to) and as the Baby Boomer population ages for the past decade I've consistently recommended some exposure to the healthcare sector for that very reason, while there will be a chronic shortage of aged care facilities and, in some locations, retirement living options.<br><br>Future births I can't reliably predict - nobody can - but by dicing up the population pyramid I do like to construct the argument that the growth in births will be much stronger than many expect, due to immigration being focused on younger arrivals, and the <a href="http://petewargent.blogspot.com.au/2017/06/demographic-tsunami" target="_blank">corresponding explosion</a> in the 25-34 year old cohort.<br><br>The births boom will just come a bit later down the track than previous trends might imply, that's all.<br><br>Unfortunately more divorces and separations will also ultimately result in an unprecedented spike in demand for inner-suburban apartments and townhomes, but that's all a while away yet.<br><br><div class="separator"><a href="https://2.bp.blogspot.com/-3xjJlS6OX_k/WrQc2VK_knI/AAAAAAAApDw/O4n-4-OnTLAs8-hkt1esyNXFoB6WhkV2wCLcBGAs/s1600/Year%2Bof%2BAge.jpg"><img src="https://2.bp.blogspot.com/-3xjJlS6OX_k/WrQc2VK_knI/AAAAAAAApDw/O4n-4-OnTLAs8-hkt1esyNXFoB6WhkV2wCLcBGAs/s640/Year%2Bof%2BAge.jpg" width="640" height="396" data-original-height="835" data-original-width="1348"></a></div>
<br><strong><span style="text-decoration: underline;">Part 2: Immigration nation</span></strong><br><br>
</div>
<div>Australia's permanent migrant intake is capped at around 200,000 per annum, but the overall pace of net overseas migration was faster than this, partly accounted for by international students.<br><br>Furthermore, earlier studies by the ABS have found that many Australians migrating overseas 'permanently' or purportedly for the long term end up returning to these shores within a remarkably short space of time, suggesting that for many the grass is not greener elsewhere.<br><br>Incidentally, I wrote in 2015 how these 'boomerang departures' would be one factor leading to a population growth rebound, inadvertently dragging me into a quagmire of social media ridicule (in the end I was right, though).<br><br>Looking at the net figures, then, we can see that net overseas migration increased by +15.4 per cent over the year to +250,100. </div>
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<p> The next slide tells its own story: immigrants still love Sydney and Melbourne, and now in record numbers. </p>
<div> </div>
<div>Concerningly for the regional centres of Australia, the <em>Characteristics of Recent Migrants</em> survey showed that not only do migrants uniformly head to the capital cities, <a href="http://petewargent.blogspot.com.au/2017/06/migrants-flock-to-capital-cities-stay" target="_blank">they also now overwhelmingly remain there</a>. </div>
<div> </div>
<div>I know a bit about this, because I'm one of the said migrants, although like many I've made a couple of internal capital city moves since my first arrival in Australia in the 1990s. </div>
<div> </div>
<div>During the mining boom years through until 2012 immigrants also flocked to the resources states. </div>
<div> </div>
<div>I recall Simon Reeve's BBC documentaries revealing to stunned Britons that expat truck drivers in Western Australia were earning salaries that most working class Poms could only dream of, and to rub further salt into their wounds the truckies were living in houses with swimming pools you could actually swim in! </div>
<div> </div>
<div>Although Queensland has experienced something of a rebound, the drawcard for the resources states is not nearly as strong as it used to be, and South Australia has at least half a foot in that camp too. </div>
<div> </div>
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<div>
<br>Going forward Sydney, Melbourne and south-east Queensland are projected to capture the bulk of population growth.<br><br>Perth will now have direct flights to Europe in its favour, but my analysis here previously has shown that in the future almost all of the net growth in the overseas born population will be driven by migrants of Asian origin.<br><br>European-born Baby Boomers are set to drop off the perch and more Asian migrants and international students from China and India are dominating the intake (with many expected to become permanent residents later).<br><br>This in turn has a strong impact on future demographic pull-factors, including for family visas and future international students.<br><br><strong><span style="text-decoration: underline;">Part 3: Upping sticks</span></strong><br><br>One of the main trends to watch for me at the moment is internal movements as the two most populous capital cities adjust to the latest influx.<br><br>Sydney in particular can be wearisome at times with the delivery of the CBD &amp; South East Light Rail project still seemingly an age away, although testing on the Randwick section is at least now underway.<br><br>This is scant consolation, I expect, for the commuting residents of Randwick and Coogee currently experiencing near-unfathomable gridlock on their short 6 to 8km journey to the city, only to discover that when then arrive in the city the key CBD thoroughfares are being dug up there too.<br><br>For this reason and others, Queensland has now usurped Victoria as the typical interstate migrant's destination of choice with net inflows hitting a decade high of above +19,000.<br><br>About 12,000 of those came from New South Wales on a net basis, with the ratio of Sydney's house prices to those in Brisbane tracking at the highest level we've ever seen at above 2.2. One way or another that ratio will likely close back below 2. </div>
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<div> </div>
<div>Although not included here because it would simply be a long, flat, green line on this Y-axis scale, Tasmania is now attracting more than a smattering of interstate migrants at +1,000 net over the year to September.<br><br>Net interstate migration away from struggling South Australia is not a new thing, and indeed the ABS figures record that well over 100,000 South Australians have relocated elsewhere on a net basis since the early 1980s.<br><br>South Australia now has the slowest population growth of all the states in percentage terms at +0.6 per cent, but it's the composition of demographic change rather than the absolute headcount that should be of most concern.<br><br>The present speed of the outflow is somewhat alarming, especially because interstate migration can have an irritating tendency to sap a capital city of its potential best and brightest.<br><br>Since the peak of the mining boom in late 2012, South Australia has lost more than -23,000 residents interstate, with many skipping in a south-easterly direction to the brighter lights of Melbourne.<br><br>I don't know how that trend gets arrested, but someone needs to have a deep think about it.<br><br><strong><span style="text-decoration: underline;">Part 4: Totting it up</span></strong><br><br>Totting it all up, then, strength in net interstate migration takes Queensland's population growth all the way back up to +81,300, from a cyclical nadir of below +60,000 in 2015.<br><br>Brisbane typically accounts for 60 to 65 per cent of that growth with Queensland being the one Australian state with diverse and thriving regional centres including Gold Coast (which is set to benefit imminently from the 2018 Commonwealth Games) and Caloundra on the Sunshine Coast.<br><br>I looked <a href="http://petewargent.blogspot.com.au/2018/03/queensland-population-to-pass-5-million" target="_blank">in a bit more detail here</a> at where the main population flows are headed in the Sunshine State.<br><br>But even this rate of state population growth growth pales into insignificance next to Victoria (+147,400) and New South Wales (+123,100).  </div>
<div class="separator"><a href="https://4.bp.blogspot.com/-rVhLXroTZG8/WrMuBDlljYI/AAAAAAAApDQ/8CFZqEvcAhcUNt8y8KF0J6jY9zHqfUkOQCLcBGAs/s1600/C5.jpg"><img src="https://4.bp.blogspot.com/-rVhLXroTZG8/WrMuBDlljYI/AAAAAAAApDQ/8CFZqEvcAhcUNt8y8KF0J6jY9zHqfUkOQCLcBGAs/s640/C5.jpg" width="640" height="386" data-original-height="834" data-original-width="1379"></a></div>
<div> </div>
<div>A significant <a href="http://petewargent.blogspot.com.au/2017/06/melbourne-population-growth-blows-doors" target="_blank">intercensal difference</a> emerged in the 2016 Census and found that the nadir in population growth in Western Australia was considerably lower than previously believed, partly accounting for the dwelling stock overhang, though population growth is now picking up again and the housing market is rebalancing. </div>
<p> </p>
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<div> </div>
<div>Western Australia's annual population growth was up to +22,000 or +0.9 per cent.</div>
<div> </div>
<div>Finally, the Northern Territory experienced a small population decline in the September 2017 quarter, which is fairly unusual, though not unheard of. </div>
<div> </div>
<div>I've even lived in Darwin myself, which says something about what a cyclical type of place it can be. </div>
<div> </div>
<div>Through recent episodes of disruption there have been strong correcting factors such a once-in-150 year resources boom or the Cyclone Tracy rebuild to drive the Territory forward. </div>
<p> </p>
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<p> </p>
<div>I'm not sure what comes next for the NT through the Ichthys/INPEX construction phase wash-up, but then again I haven't been to Darwin for a couple of years and it's the sort of place that likes to deliver surprises. </div>
<p> </p>
<div><strong><span style="text-decoration: underline;">The wrap</span></strong></div>
<div> </div>
<div>Overall, then, estimated growth in the resident population at +395,600 was comfortably stronger than a year earlier, when it was +370,400.</div>
<div> </div>
<div>Australia's estimated resident population will accordingly pass 25 million within just a few months from today, with Queensland's population projected to surpass 5 million in May. </div>
<div> </div>
<div>After accounting for the concentration of migrants into the capitals Greater Melbourne is growing at about the fastest pace ever.<br><br>Sydney is losing some residents internally to the NSW regions, to the south, north, and west, as Baby Boomers take their new-found housing equity elsewhere for a lifestyle change.</div>
<div> </div>
<div>South-east Queensland population growth will pick up as the <a href="http://petewargent.blogspot.com.au/2018/03/queensland-population-to-pass-5-million" target="_blank">magnetic north</a> does its thing, and in fact it already is as anyone living in inner Brisbane will testify.<br><br><div class="separator"><a href="https://1.bp.blogspot.com/-GdOeqtrS-C8/WrQv9MBrEoI/AAAAAAAApEQ/Kidd_RvjMVUO1dxt1Yr-LpN-Yxtie7F0wCLcBGAs/s1600/QLD.jpg"><img src="https://1.bp.blogspot.com/-GdOeqtrS-C8/WrQv9MBrEoI/AAAAAAAApEQ/Kidd_RvjMVUO1dxt1Yr-LpN-Yxtie7F0wCLcBGAs/s640/QLD.jpg" width="640" height="388" data-original-height="813" data-original-width="1339"></a></div>
</div>
<div>Next I'll get around to posting my mapping population growth versus dwelling completions, which will reveal an interesting outcome or two, especially for Melbourne and Brisbane.</div>
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Immigrants still love Sydney and Melbourne, and now in record numbers

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<div>The Reserve Bank of Australia (RBA) released its Financial Aggregates figures for October 2017, which showed housing credit expanding by +6.5 per cent over the past 12 months.</div>
<div> </div>
<div>Investor credit is slowing, but total housing credit growth remained higher than a year earlier, when it was +6.4 per cent.</div>
<div> </div>
<div>Total housing credit broke through $1.7 trillion on the strength in owner-occupier lending. </div>
<div> </div>
<div>$60 billion of loans have now been reclassified from investor to owner-occupier. </div>
<p> </p>
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<p> </p>
<div>Personal credit contracted by -0.9 per cent over the year, while annual business credit growth was steady at +4 per cent.<br><strong><span style="text-decoration: underline;"><br></span></strong><strong><span style="text-decoration: underline;">Know your limits</span></strong>
</div>
<div> </div>
<div>APRA also released its monthly banking statistics, which revealed a similar trend, with the monthly result showing considerably faster growth in owner-occupier loans (+0.6 per cent) than investment lending (+0.15 per cent). </div>
<div> </div>
<div>Comparing the aggregates suggests that non-banks continue to garner market share. </div>
<div> </div>
<div>Westpac has been offering discounted investor loans of late, and took the opportunity to grow its investment loans books further in the month (it already has the largest mortgage book pertaining to investors). </div>
<p> </p>
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<p> </p>
<div>Indeed, not only is new interest-only lending now well below the proposed regulatory cap, all of the major banks are now seeing investor credit growing at way below the 10 per cent annual speed limit. </div>
<p> </p>
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<p> </p>
<div>These statistics show that there is potentially plenty of scope for banks to incentivise faster investor lending in 2018, particularly Commonwealth Bank and ANZ Bank.<br><br>Oh, and there's a Royal Commission to follow!</div>
<div> </div>
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RBA's October Financial Aggregates figures sees housing credit expand

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<p>S&amp;P Global Ratings has reported that Australia's prime SPIN 30+ day delinquencies declined a little further from 1.08 per cent to 1.04 per cent in October 2017.</p>
<div id="post-body-3454931207027681415">
<div>
<p>31-60 day prime mortgage arrears have now been tracking at historic lows since June 2017.</p>
<p>There's still a bit happening in the 90+ days space, but arrears have been improving here too since May.</p>
<p>Year-on-year mortgage arrears were comfortably lower.</p>
<p><a href="https://1.bp.blogspot.com/-KxfCYFuanl0/Wjgn0DCCqvI/AAAAAAAAnks/ALly7UBUGHcvhI-sIXAjjgrxzzHjIXxuQCLcBGAs/s1600/S%2526P%2BArrears.jpg" target="_blank"><img src="https://1.bp.blogspot.com/-KxfCYFuanl0/Wjgn0DCCqvI/AAAAAAAAnks/ALly7UBUGHcvhI-sIXAjjgrxzzHjIXxuQCLcBGAs/s640/S%2526P%2BArrears.jpg" width="640" height="380" data-original-height="800" data-original-width="1347"></a></p>
</div>
<div>Declines were reported in all mainland states and territories. </div>
<br><div><a href="https://2.bp.blogspot.com/-c-AKP9xZqh8/WjddO7rxMYI/AAAAAAAAnj4/lQtqxkBFhFUyC2hsBnDCSK4yElKrWBc6ACLcBGAs/s1600/SandP.jpg" target="_blank"><img src="https://2.bp.blogspot.com/-c-AKP9xZqh8/WjddO7rxMYI/AAAAAAAAnj4/lQtqxkBFhFUyC2hsBnDCSK4yElKrWBc6ACLcBGAs/s400/SandP.jpg" width="400" height="327" data-original-height="646" data-original-width="788"></a></div>
<br><div>Source: S&amp;P Global Ratings</div>
<br><div>Western Australia continued to have the highest rate of 30-day arrears, declining from 2.21 per cent to 2.12 per cent. </div>
<div> </div>
<div>The lowest rate of delinquency was to be found in the ACT at only 0.58 per cent (Canberra has <a href="http://petewargent.blogspot.co.uk/2017/11/drain-swamp" target="_blank">by far the highest incomes</a> on the country). </div>
<div> </div>
<div>In New South Wales 30-day arrears fell from 0.79 per cent to only 0.75 per cent in the month.</div>
<div> </div>
<div>Arrears were also below 1 per cent in Victoria and Tasmania.<br><br>Over the past year the biggest improvers were the southern states of Tasmania and South Australia (the other ex-mining state jurisdictions had low arrears already).<br><br><div><a href="https://2.bp.blogspot.com/-z4KH6mQAhPg/Wjg08TYwYLI/AAAAAAAAnk8/r_3IgizuDq8j_7_DPiwD5DC_iYSh_KyYwCLcBGAs/s1600/S%2526P%2BState.jpg" target="_blank"><img src="https://2.bp.blogspot.com/-z4KH6mQAhPg/Wjg08TYwYLI/AAAAAAAAnk8/r_3IgizuDq8j_7_DPiwD5DC_iYSh_KyYwCLcBGAs/s640/S%2526P%2BState.jpg" width="640" height="386" data-original-height="787" data-original-width="1302"></a></div>
</div>
<div>As at the beginning of 2017, S&amp;P Global had reported:<br><br>"We believe that the risk of a sharp, disorderly correction in house prices remains relatively low, reflecting our stable economic outlook for Australia."<br><br>While risks remain, S&amp;P commented this month:</div>
<div> </div>
<div>"We do not expect arrears to increase much above current levels while benign economic conditions persist." </div>
</div>
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Mortgage delinquencies decline further: Pete Wargent

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<div>In August 2017 I attempted to estimate the value and timing of forced interest-only ('IO') resets as a result of tighter lending standards. </div>
<div> </div>
<div>Since that time many rational borrowers have elected to switch to principal and interest (P&amp;I) loans to benefit from the more attractive mortgage rates on offer. </div>
<div> </div>
<div>APRA's quarterly ADI figures showed that the flow of new IO loans was under 16 per cent for a second consecutive quarter. </div>
<div> </div>
<div>This dynamic combination has had a marked impact on the stock value of outstanding IO loans, declining by $93.2 billion of 16.1 per cent year-on-year.</div>
<div> </div>
<div>As a share of ADI residential term loan exposures IO loans have therefore been reduced to 31 per cent as at March 2018, well down from close to 39 per cent a year earlier. </div>
<p> </p>
<div class="separator"><img src="https://1.bp.blogspot.com/-8ZXOTXlNodQ/Wy8El82AoVI/AAAAAAAAqwI/Ksa4JePKI1oQlWmiti6A7-46KuZ3uYeugCLcBGAs/s640/APRA1.jpg" width="640" height="374" data-original-height="803" data-original-width="1367"></div>
<p> </p>
<div>Most borrowers appear to be handling the switch comfortably.</div>
<div> </div>
<div>Those most impacted are likely to be portfolio investors, although many of this cohort built their portfolios over a long period of time, building equity and cashflow in doing so. </div>
<div> </div>
<div>Some may have to sell a property or two in order to reduce debt. </div>
<div> </div>
<div>The share of higher loan-to-value (LVR) ratio lending continued to tighten in the March quarter, having already declined considerably since 2014. </div>
<div> </div>
<div class="separator"><img src="https://1.bp.blogspot.com/-xenupVlmdH4/Wy8El_m7iWI/AAAAAAAAqwQ/-WTHJbrtXA4wGT7M1HI2xxF-dGZjeU-_ACEwYBhgL/s640/APRA2.jpg" width="640" height="366" data-original-height="790" data-original-width="1378"></div>
<div> </div>
<div>The latest figures relate to the first three months of 2018, so it's difficult to know whether the Royal Commission had any further impact over the following period through to June.</div>
<div> </div>
<div>It's interesting to note that the major lenders have lost some market share over time.</div>
<div> </div>
<div>Yet bank share prices saw a punchy rebound this week, possibly relating to a short squeeze, or more likely a pervading sense of relief as the media loses its appetite for daily stories from the Royal Commission. </div>
<div> </div>
<div>
<span>PETE WARGENT is the co-founder of AllenWargent property buyers (London, Sydney) and a best-selling author and </span><a href="https://petewargent.blogspot.com/" target="_blank">blogger</a><span>.</span>
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