<p data-end="587" data-start="368">Queensland builder-developer MAYD has revealed the first look at its major North Kirra beachfront development, lodging amended plans that reduce the number of apartments and increase the proportion of larger residences.</p>

<p data-end="778" data-start="589">The project is planned across a substantial 4,742 sqm amalgamated site spanning seven lots at <a href="https://www.apartments.com.au/new-apartments/2-6-pacific-parade-bilinga-qld-4225">2-6 Pacific Parade</a> and 27-33 Golden Four Drive in Bilin​ga, directly opposite Nor​th Kirra Beach.</p>

<p data-end="907" data-start="780"><a href="https://www.apartments.com.au/developers/mayd-group">MAYD</a> secured the site for $32.5 million in 2025, in what was one of the Gold Coast's largest property transactions of the year.</p>

<p data-end="1052" data-start="909">The development will be delivered across two stages, with the first stage carrying an estimated gross realisation value of around $360 million.</p>

<p data-end="1311" data-start="1054">The latest amendments seek to reduce the overall apartment count and shift the project further toward the owner-occupier market, with larger residences designed for buyers wanting considerably more space than traditionally offered in a beachfront apartment.</p>

<p data-end="1451" data-start="1313">The residential mix will include townhomes, oversized two-bedroom apartments, substantial three-bedroom residences and four-bedroom homes.</p>

<p data-end="1676" data-start="1453">MAYD has appointed Cera Stribley to lead the architecture and interiors, with the Melbourne-based design practice drawing on the beachfront setting through a series of ocean-facing terraces and heavily landscaped balconies.</p>

<p data-end="1908" data-start="1678">Strong horizontal forms and curved balconies will define the exterior, with subtropical landscaping integrated throughout the building to soften the built form and increase the connection between the residences and the beachfront.</p>

<p data-end="2142" data-start="1910">The project will also include an extensive collection of resident wellness and lifestyle facilities, continuing the broader shift across the Gold Coast's luxury apartment market toward larger homes supported by resort-style amenity.</p>

<p data-end="2142" data-start="1910"><img alt="MAYD" data-entity-type="file" data-entity-uuid="d1bcbb05-e659-4b47-8bd4-1e595315e2ad" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-27%20at%202.05.03%E2%80%AFPM.png?VersionId=jj0XEud1X1DuLt7_KyElhjMdZGOXmLHP" /></p>

<p data-end="2308" data-start="2144">MAYD Founder Todd Mould said North Kirra was increasingly appealing to buyers attracted to the more established, lower-density character of the southern Gold Coast.</p>

<p data-end="2648" data-start="2310">"North Kirra presents one of the most compelling luxury residential opportunities currently emerging in Australia, combining absolute beachfront with the character and authenticity that buyers are increasingly seeking, and the same sense of tight-knit community that defined Burleigh and Currumbin perhaps 10 or 15 years ago," Mould said.</p>

<p data-end="2797" data-start="2650">"With Gold Coast Airport on its doorstep, it also offers a level of accessibility that broadens its appeal across almost every market demographic."</p>

<p data-end="2938" data-start="2799">The project comes as the southern Gold Coast continues to attract an increasing share of high-end apartment development and buyer activity.</p>

<p data-end="3216" data-start="2940">Kirra in particular has emerged as one of the region's more tightly held beachfront markets, with its relatively low-density character, established surf and hospitality scene and proximity to Gold Coast Airport differentiating it from the higher-density markets further north.</p>

<p data-end="3325" data-start="3218">Mould said those characteristics had informed the approach MAYD and Cera Stribley had taken to the project.</p>

<p data-end="3442" data-start="3327">"We've worked closely with Cera Stribley to create a vision that is deeply connected to its surroundings," he said.</p>

<p data-end="3662" data-start="3444">"Inspired by the coastline itself, the architecture has been shaped around space, privacy and resort-style living, creating a collection of homes that reflects the next generation of luxury on the southern Gold Coast."</p>

<p data-end="3818" data-start="3664">MOTIV Managing Director Carly Cottam, who has been appointed to market the project, said buyer attention had continued to move south along the Gold Coast.</p>

<p data-end="4076" data-start="3820">"Purchasers who may once have defaulted to Broadbeach, Main Beach or Surfers Paradise are increasingly recognising the value of a genuine beachfront location that offers lower density, strong amenity and a more established sense of community," Cottam said.</p>

<p data-end="4375" data-start="4078">"Kirra has a powerful combination of growing demand and genuine scarcity. Beachfront supply is inherently constrained, the area remains relatively low density, and buyers are increasingly placing a premium on locations that feel established, uncrowded and authentic rather than heavily developed."</p>

<p data-end="4503" data-start="4377">Cottam said the proximity to Gold Coast Airport was also proving increasingly important for interstate and second-home buyers.</p>

<p data-end="4741" data-start="4505">"Being minutes from Gold Coast Airport makes it particularly compelling for interstate buyers, frequent travellers and second-home purchasers who can access an authentic coastal lifestyle almost immediately after stepping off a flight."</p>

<p data-end="4910" data-start="4743">The acquisition takes MAYD's active development portfolio to more than $500 million, with the North Kirra project representing one of its largest undertakings to date.</p>

<p data-end="4951" data-start="4912">MAYD is targeting an early 2027 launch.</p>


Joel Robinson

First look at MAYD's North Kirra mixed-use precinct

<main data-perf-region="main">
<p data-end="600" data-start="394">Castle Hill, the longtime hub of the Hills District, has been one of the major beneficiaries of Sydney's Metro expansion, with improved connectivity helping drive continued population growth, development and buyer demand across the Hills District.</p>

<p data-end="733" data-start="602">But despite that growth, the suburb has seen relatively few major new apartment projects brought to market over the past 18 months.</p>

<p data-end="970" data-start="735">Hills District developer Reve Group is looking to fill that gap with <a href="https://www.apartments.com.au/new-apartments/nova-r-ve-castle-hill-2-garthowen-crescent-castle-hill-nsw-2154">Nova Rêve</a>, a major new mixed-use precinct on the corner of Garthowen Crescent and Old Castle Hill Road, a short walk from Castle Hill Metro Station and Castle Towers.</p>

<p data-end="970" data-start="735">[smartcode_project:default project_id=152737 project_image_fid=377679]</p>

<p data-end="1159" data-start="972">The project will comprise three residential towers alongside a hotel, restaurants, cafes and a skybar, more than 1,600 sqm of ground-floor retail and almost an acre of landscaped gardens.</p>

<p data-end="1357" data-start="1161">It represents the largest project undertaken by Reve Group, the development arm of the Kassis family, which has been building across the Hills District for more than 30 years through Kassis Homes.</p>

<p data-end="3400" data-start="3216">[smartcode_project:default project_id=152737 project_image_fid=377675]</p>

<p data-end="3400" data-start="3216">Nova Rêve also represents a significant step up from the family's first apartment development, Grand Rêve, which was delivered nearby on Garthowen Crescent.</p>

<p data-end="1664" data-start="1517">Grand Rêve introduced larger, house-like apartment layouts and premium inclusions including Wolf and Sub-Zero appliances to the Castle Hill market.</p>

<p data-end="1826" data-start="1666">Nova Rêve takes that approach to a precinct scale, combining the residential component with hospitality, retail and substantial public and resident landscaping.</p>

<p data-end="1826" data-start="1666">[smartcode_project:default project_id=152737 project_image_fid=377685]</p>

<p data-end="2045" data-start="1828">Reve Group Managing Director Sam Kassis said the project reflected the family's three decades of building in the Hills, which has evolved from trophy homes on quarter-acre blocks to larger-scale apartment development.</p>

<p data-end="2269" data-start="2047">"Grand Rêve was our first apartment project here and it showed us what this pocket of Castle Hill could be. Nova Rêve is the refinement of that idea: not just apartments, but a place the whole suburb can use," Kassis said.</p>

<p data-end="2430" data-start="2271">A key part of that approach is the hotel, which has been designed to operate as an amenity for the wider Castle Hill community rather than solely hotel guests.</p>

<p data-end="2606" data-start="2432">It will include restaurants, cafes, skybars and all-day dining, alongside conference and event facilities catering to business functions, community groups and private events.</p>

<p data-end="2724" data-start="2608">At ground level, more than 1,600 sqm of shops and cafes will open onto the surrounding streets and landscaped areas.</p>

<p data-end="2892" data-start="2726">Almost an acre of gardens designed by Land and Form Studios will run through the precinct, incorporating pathways, seating, barbecue areas and children's play spaces.</p>

<p data-end="2892" data-start="2726">[smartcode_project:default project_id=152737 project_image_fid=377680]</p>

<p data-end="3004" data-start="2894">Reve Group's Romio Georges said creating an active ground plane had been central to the planning of Nova Rêve.</p>

<p data-end="3214" data-start="3006">"There are gardens with pathways, barbecues, seating and play areas, shops and cafes opening onto the street, and a hotel with restaurants and a skybar that anyone in Castle Hill can walk into," Georges said.</p>

<p data-end="3400" data-start="3216">The project's elevated position on one of Sydney's highest ridgelines will also provide apartments with outlooks toward the Sydney skyline, surrounding parkland and the Blue Mountains.</p>

<p data-end="3400" data-start="3216">More than 80 per cent of the apartments will occupy corner positions, with Turner responsible for both the architecture and interiors.</p>

<p data-end="3670" data-start="3538">&nbsp;</p>

<p data-end="3670" data-start="3538">[smartcode_project_cta:default project_id=152737]</p>

<h3 data-end="3697" data-section-id="q3n5ak" data-start="3672">&nbsp;</h3>
</main>


Nova Rêve arrives as Reve Group bets on Castle Hill's next growth phase

<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>


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

Pete Wargent

<html><body>
<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>
</body></html>

pwargent-M4siyDbqQY

Students help temporary visa holders soar towards 2 million: Pete Wargent

<html><body>
<div>There are certainly some weird ideas out there about property supply.</div>
<div> </div>
<div>Take the example of Pyrmont, if only because I lived there for many years, and as a property owner in the suburb, it's one of the locations I know pretty well. </div>
<div> </div>
<div>From time to time I've heard it said that suburbs like Pyrmont have "too much supply".</div>
<div> </div>
<div>I guess I can kind of see why you might think that if you'd just landed in Sydney, for with about 13,000 residents jammed in to one tight square kilometre, it's the densest suburb in Australia.</div>
<div> </div>
<div>Thing is, the bit of the suburb where people want to live was developed about 25 years ago now!</div>
<div> </div>
<div>There's been very little of note lately, though. </div>
<div> </div>
<div>From memory that was a little unit development on Pyrmont Bridge Road, and there's been a bit going on at Ultimo. </div>
<div> </div>
<div>Oh, and then there was Lend Lease's 391 apartments in the new 40-storey tower at Darling Square, although they sold out in, what, five hours?</div>
<div> </div>
<div>If you were to fast forward to a decade's time I expect that Wentworth Park and White Bay will be developed with apartments, probably the fish markets too one day, while if Mirvac get their way there will be a commercial/residential tower on top of what is now the Harbourside tourist trap.</div>
<div> </div>
<div>These types of developments can take years to become a reality, though. </div>
<div> </div>
<div>At the end of the day, there isn't an oversupply issue here because more and more people want to live in the area by the year.</div>
<div> </div>
<div>Ultimately there are shedloads of people like me who'd enjoy a lazy 5-minute stroll into the city in the morning instead of driving through miles of petroleum fumes and vehicular logjam. </div>
<div> </div>
<div>After accounting for the inevitable frictional vacancies, vacancy rates in Pyrmont are essentially zero. </div>
<div> </div>
<div><a href="https://4.bp.blogspot.com/-xBc8yaCwwn0/WG7AugNs4OI/AAAAAAAAhDw/tWnNA8e6WNEx3TzLnbLqoU-3wbKYLHcVgCLcB/s640/PYMRONT.jpg" target="_blank">Click to enlarge</a></div>
<div> </div>
<p><a href="https://4.bp.blogspot.com/-xBc8yaCwwn0/WG7AugNs4OI/AAAAAAAAhDw/tWnNA8e6WNEx3TzLnbLqoU-3wbKYLHcVgCLcB/s1600/PYMRONT.jpg" target="_blank"><img src="https://4.bp.blogspot.com/-xBc8yaCwwn0/WG7AugNs4OI/AAAAAAAAhDw/tWnNA8e6WNEx3TzLnbLqoU-3wbKYLHcVgCLcB/s640/PYMRONT.jpg" width="640" height="340"></a></p>
<div>Source: SQM Research</div>
<div> </div>
<div>There will be the new developments over time, but we're more or less always playing catch up with demand. </div>
<div> </div>
<div>You could say the same of, say, Coogee in the beachside eastern suburbs, or Manly to the north. Stacks of demand, not much of note being built. </div>
<div> </div>
<div>Even in inner-city Erskineville, which has seen development aplenty both within the suburb and all around it, vacancy rates are very tight, because it's such a convenient and popular location to live in. Loads of demand.</div>
<p><a href="https://4.bp.blogspot.com/-xyZE02fQnNE/WG7ArXnXA-I/AAAAAAAAhDk/9JLq0Ia5jekQu87qnSXqg03szTeCAM9LACLcB/s640/ERKO.jpg" target="_blank">Click to enlarge</a><br><br><a href="https://4.bp.blogspot.com/-xyZE02fQnNE/WG7ArXnXA-I/AAAAAAAAhDk/9JLq0Ia5jekQu87qnSXqg03szTeCAM9LACLcB/s1600/ERKO.jpg" target="_blank"><img src="https://4.bp.blogspot.com/-xyZE02fQnNE/WG7ArXnXA-I/AAAAAAAAhDk/9JLq0Ia5jekQu87qnSXqg03szTeCAM9LACLcB/s640/ERKO.jpg" width="640" height="342"></a></p>
<div> </div>
<div>Source: SQM Research</div>
<div> </div>
<div>Those are the kind of suburbs I don't mind owning property forever in, through the cyclical peaks and troughs.</div>
<p>Apartment glut<br><br> Now, this is not to say that things aren't a little different elsewhere.</p>
<div>Where exactly? Follow the cranes!</div>
<div> </div>
<div>Wentworth Point is just a mass of new apartments, and without being unkind, I can't imagine what it would be like to live there.</div>
<div> </div>
<div>I guess you'd soon get used to it, though, since as far as I could tell there's only one road in and out (like the Twiglet zone: "Easy to enter, impossible to leave")!</div>
<div> </div>
<div>Vacancy rates are up, up and away...</div>
<div> </div>
<div><a href="https://3.bp.blogspot.com/-Ahyf5FSt0-A/WG7KfKxVcCI/AAAAAAAAhEA/zs6zwtQHABUHOvMA4r_2xAmvBDSm6quigCLcB/s640/Wentowrth%2Bpoint.jpg" target="_blank">Click to enlarge</a></div>
<div> </div>
<div><a href="https://3.bp.blogspot.com/-Ahyf5FSt0-A/WG7KfKxVcCI/AAAAAAAAhEA/zs6zwtQHABUHOvMA4r_2xAmvBDSm6quigCLcB/s1600/Wentowrth%2Bpoint.jpg" target="_blank"><img src="https://3.bp.blogspot.com/-Ahyf5FSt0-A/WG7KfKxVcCI/AAAAAAAAhEA/zs6zwtQHABUHOvMA4r_2xAmvBDSm6quigCLcB/s640/Wentowrth%2Bpoint.jpg" width="640" height="350"></a></div>
<div> </div>
<div>
<div>Source: SQM Research</div>
<div> </div>
</div>
<div>In Parramatta, there have been high rise towers going up all over the show throughout the last year, a huge concentration risk of generic, high rise, shoebox apartments. </div>
<div> </div>
<div>With net multi-unit completions rising fast in 2015 and 2016, vacancy rates have already increased to well above 3 per cent, and there's always an inherent risk of understatement in reported vacancy rates at this stage in the construction cycle. </div>
<div> </div>
<div>There were another 3,500 dwellings approved in the last financial year too, and overwhelmingly, they were multi-unit in nature at 2,750. Golly gosh...</div>
<p><a href="https://1.bp.blogspot.com/-TEDIDC6V4OI/WG7AtXKDdgI/AAAAAAAAhDo/chxzk69LiMoioCMQi8YHsNZgVBCO_LCqQCLcB/s640/PARRA.jpg" target="_blank">Click to enlarge</a></p>
<p><br><a href="https://1.bp.blogspot.com/-TEDIDC6V4OI/WG7AtXKDdgI/AAAAAAAAhDo/chxzk69LiMoioCMQi8YHsNZgVBCO_LCqQCLcB/s1600/PARRA.jpg" target="_blank"><img src="https://1.bp.blogspot.com/-TEDIDC6V4OI/WG7AtXKDdgI/AAAAAAAAhDo/chxzk69LiMoioCMQi8YHsNZgVBCO_LCqQCLcB/s640/PARRA.jpg" width="640" height="356"></a><br><br> I also read somewhere this week that Blacktown is about to "boom".</p>
<div>Hmm, well that depends how you define 'boom', I guess! A construction boom, maybe. A boom in traffic congestion?</div>
<div> </div>
<div>That too! I'm somewhat less than convinced about there being a 2017 property boom in the conventional sense, though. </div>
<div> </div>
<div>One thing that you can say in favour of the LGA of Blacktown is that at least there is a level of diversity of development stock between apartments and detached dwellings. </div>
<div> </div>
<div>Even so, with more than 11,700 dwellings approved over the last three years and a huge construction pipeline, it looks likely to me that vacancy rates will only be heading north putting more downward pressure on rates.</div>
<p><a href="https://4.bp.blogspot.com/-TF-oPQjYAWw/WG7AuciggyI/AAAAAAAAhDs/TFT0_qDYPbIDlgfzuRJlH8xW199o2Y31gCLcB/s640/BLACKTOWN.jpg" target="_blank">Click to enlarge</a></p>
<div><a href="https://4.bp.blogspot.com/-TF-oPQjYAWw/WG7AuciggyI/AAAAAAAAhDs/TFT0_qDYPbIDlgfzuRJlH8xW199o2Y31gCLcB/s1600/BLACKTOWN.jpg" target="_blank"><img src="https://4.bp.blogspot.com/-TF-oPQjYAWw/WG7AuciggyI/AAAAAAAAhDs/TFT0_qDYPbIDlgfzuRJlH8xW199o2Y31gCLcB/s640/BLACKTOWN.jpg" width="640" height="340"></a></div>
<div> </div>
<div>There are plenty more suburbs like Parramatta and Blacktown that face a surfeit of new stock as mentioned here previously, including in the Hills District. </div>
<div> </div>
<div>And that's before we even mention the wild exuberance in Western Sydney house prices, with suburb records being smashed by the month in 2016 just as mortgage rates are now beginning to creep back up. </div>
<div> </div>
<div>It'll be very interesting to watch all of this play out in 2017. </div>
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Stock versus flow in inner-Sydney apartments: Pete Wargent

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<p>Home prices rose by 10.9 per cent in the capital cities in 2016.<br><br>The gains were largely concentrated in Sydney (+15.5 per cent) and Melbourne (+13.7 per cent).<br><br>In Sydney home values rose by $10,000 per month in 2016.<br><br>Brisbane was a clear two-speed market and recorded gains of only +3.6 per cent overall.<br><br>Australia's regional centres recorded moderate gains of +2.8 per cent.<br><br></p>
<div><a href="https://1.bp.blogspot.com/-V0-hx0y4Hxg/WGt1IW6r61I/AAAAAAAAhBc/Hj7EGOAF1XELqgVtmeNSeTEU2dTKG3bsACLcB/s1600/CL.jpg"><img src="https://1.bp.blogspot.com/-V0-hx0y4Hxg/WGt1IW6r61I/AAAAAAAAhBc/Hj7EGOAF1XELqgVtmeNSeTEU2dTKG3bsACLcB/s640/CL.jpg" width="640" height="314"></a></div>
<p><br>In Perth home values are now 7.9 per cent below their 2014 peak, and in Darwin prices are down by 5.9 per cent cumulatively.</p>
<div>However, CoreLogic noted that both markets appear to be "moving through their low points" with both markets reporting strong gains in the last quarter of the year of +2.8 per cent and +5.9 per cent respectively.</div>
<div> </div>
<div>These figures seem to be at odds with low sentiment and high vacancy rates, but will be interesting to watch in 2017.</div>
<p>Regional NSW performed well in parts but there was comparatively little joy elsewhere:</p>
<div>"The remaining rest-of-state regions showed relatively sedate conditions, with values rising by half a per cent across regional Victoria, 1 per cent across regional Queensland and 1.1 per cent across regional South Australia.  </div>
<div> </div>
<div>Regional Western Australia recorded a 7 per cent fall in house values over the year."</div>
<div>
<p>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>.</p>
<p>His latest book is <a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank" rel="nofollow">Four Green Houses and a Red Hotel</a>.</p>
</div>
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Perth dwelling prices now 7.9% below their 2014 peak

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<div>A couple of things happened in 2016 that changed the outlook for interest rates in Australia. </div>
<div> </div>
<div>Swaps had been seeking out lower and lower rates, yet fairly abruptly around September time someone or something called time on that particular party.</div>
<div> </div>
<div>Well, what happened?</div>
<div> </div>
<div>It wasn't that the economy suddenly became stronger. Hardly! </div>
<div> </div>
<div>In fact, GDP growth was actually negative for the third quarter of the calendar year, while employment growth went backwards in the months of both August and September too.</div>
<div> </div>
<div>And all measures of inflation are actually below the target 2 to 3 per cent range.<br><br>Then, what? </div>
<div> </div>
<div>Change of Governor</div>
<div> </div>
<div>While we should be wary of imposing simplistic narratives over historical trends (with hindsight giving the supposed benefit of 20/20 vision), it appears that the change in Reserve Bank Governor may have been a factor.</div>
<div> </div>
<div>During the month of September, Philip Lowe began suggested that interest rate cuts are losing their power, and seemed to infer that further cuts would only be delivered reluctantly, if at all.</div>
<div> </div>
<div>From the first meeting he chaired in the first week of October, the <a href="https://rba.gov.au/media-releases/2016/mr-16-26" target="_blank">wording</a> of the Monetary Policy Statement concluded that policy was consistent with growth and inflation returning to target over time. </div>
<div> </div>
<div>Since the day of that October meeting, 6-month OIS rates have trended only in an hawkish direction, from 1.42 per cent back up to 1.50 per cent.</div>
<div> </div>
<div><a href="https://www.propertyobserver.com.au/images/2017/01/03/RBA1.jpg" target="_blank">Click to enlarge</a></div>
<div> </div>
<div>
<div><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/2017/01/03/RBA1.jpg" alt=""></div>
</div>
<p> </p>
<p>The Reserve Bank of Australia now has a duty to "keep consumer price inflation in the economy to 2 to 3 per cent, on average, over the medium term", apparently implying no immediate need to cut rates.</p>
<div> </div>
<div>Trump bump</div>
<div> </div>
<div>The other significant event in 2016 was Donald Trump's election victory in the US, which promptly changed the inflation outlook.</div>
<div> </div>
<div>Australia's bond yields had already starting ticking back up before Trump's election triumph, with the yield on government bonds with a 10-year maturity recovering from a low of just 1.83 per cent in August to 2.31 per cent.</div>
<div> </div>
<div>But then, after an initial post-election blip, the 10-year bond yield increased sharply to 2.87 per cent, before settling down a bit to finish the year at 2.78 per cent.</div>
<div> </div>
<div><a href="https://www.propertyobserver.com.au/images/2017/01/03/RBA5.jpg" target="_blank">Click to enlarge</a></div>
<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/2017/01/03/RBA5.jpg" alt=""></p>
<div> </div>
<div>Easy, tiger!</div>
<div> </div>
<div>Through November the indicative standard variable rate (SVR) for owner-occupier mortgages was 5.25 per cent, although of course by shopping around you can get much better deals than this (the indicative discounted rate was reported at 4.50 per cent, for example). </div>
<div> </div>
<div>The reported 3-year fixed rates for both owner-occupiers and investors were lower again at 4.10 per cent and 4.25 per cent respectively. </div>
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Can you comfortably afford to repay a mortgage in a 6% or even 7% scenario?: Pete Wargent

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<p>The full ABS <a href="https://www.abs.gov.au/AUSSTATS/abs@.nsf/Lookup/6416.0Main+Features1Sep%202016?OpenDocument" target="_blank">Residential Property Price Indexes</a> (Eight Capital Cities) since its inception in 2003.<br><br><a href="https://2.bp.blogspot.com/-ppQqhCf5fec/WGDtth-j09I/AAAAAAAAg8s/q-u1MKBJvN4I2wx9adVFbuhcu_eW8HKBgCLcB/s1600/A5.jpg"><img src="https://2.bp.blogspot.com/-ppQqhCf5fec/WGDtth-j09I/AAAAAAAAg8s/q-u1MKBJvN4I2wx9adVFbuhcu_eW8HKBgCLcB/s640/A5.jpg" width="640" height="348"></a></p>
<p>Price gains by capital city since 2003 included gains of 157% in Darwin, 120% in Melbourne, 119% in Perth, 87% in Sydney, 85% in Hobart, 82% in Brisbane, 85% in Adelaide, and 66% in Canberra.</p>
<p><a href="https://4.bp.blogspot.com/-tdml2U9XRso/WGDtswL-XAI/AAAAAAAAg8o/WUMqYSeJTDIEO7GKFZzrlHx7p8RL_0WIQCLcB/s1600/A4.jpg"><img src="https://4.bp.blogspot.com/-tdml2U9XRso/WGDtswL-XAI/AAAAAAAAg8o/WUMqYSeJTDIEO7GKFZzrlHx7p8RL_0WIQCLcB/s640/A4.jpg" width="640" height="346"></a></p>
<p>The average capital city house increased in price by 164% since 2002.</p>
<p>The attached dwellings series doesn't run back that far, but also recorded large gains from its inception.</p>
<p><em><strong>PETE WARGENT </strong>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>.</em></p>
<p><em>His latest book is <a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank" rel="nofollow">Four Green Houses and a Red Hotel</a>.</em></p>
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How prices have risen since 2002: Pete Wargent

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<p>GUEST OBSERVATION</p>
<p>A lot has been made about a first home buyer 'strike' over recent years, but the NAB survey and others have shown that often young people are choosing investment property as their first step onto the ladder. </p>
<p>As such, the share of the market comprising first time buyers hasn't really changed all that much.</p>
<p>Mentioned far more rarely (or more like never) is that with most people doing things later in life than used to be the case, relatively speaking there just haven't been that many people in the key age bracket to buy their first home either.</p>
<p>This is especially so given that the average first timer is likely to be in their 30s these days, at least in the main capital cities.</p>
<p>This trough in Australia's demographic waves might have been one of the more convincing parts of the bear case for the housing markets in recent years, but in the end policy makers opted to sidestep the potential wipeout by cutting interest rates to record lows.</p>
<p>It largely worked by drawing more investors into the froth rather than through pulling forward demand.</p>
<p>In surfing terminology, we've been in a demographic trough for a long period, but it seems that the swell is now beginning to build.</p>
<p><strong> The next wave</strong></p>
<p>It's probably not for a few years yet that the number of persons in the 31 to 40 age bracket reaches a critical mass that might be considered compelling.</p>
<p>Yet the demographic statistics figures for the quarter ended June 2016 showed that finally things are beginning to move in that direction, with a significant 2% leap in this cohort during the financial year. </p>
<p>Between now and 2026 the number of persons in this age bracket is <a href="https://petewargent.blogspot.co.uk/2015/08/making-waves-in-aussie-housing-market" target="_blank">projected to swell dramatically</a>.</p>
<p>Looked at graphically, you can see the trough in the 31 to 40 age bracket becoming emphatic over the last decade.<br><br> However, the red line shows that the housing market is just beginning reaping the benefits of the ramped up immigration programme (which is tilted heavily towards immigrants aged under 30). </p>
<p><img src="https://4.bp.blogspot.com/-bG2S6vRWaqw/WGKN-skn54I/AAAAAAAAg9U/LyJnpIggbCQXm_zF8onwT6DyBNxw2KShACLcB/s640/B1.jpg"></p>
<p>Looked at another way, after mostly treading water for years the number of 31 to 40 year old residents jumped by more than 118,000 in the last 24 months, with hundreds of thousands more to come in a demographic wave between now and 2026.</p>
<p><img src="https://2.bp.blogspot.com/-PAd8lrtsER0/WGKN9ApG3OI/AAAAAAAAg9Q/3OLVLyzixG83SULWl4fj47n9dxivwpD0wCLcB/s640/B2.jpg"></p>
<p>This is important because although individual choices differ and trends shift over time, in aggregate people tend to do quite predictable things at fairly predictable stages in their lives. </p>
<p><strong>Variations around the traps</strong><span style="font-size: 12.16px;"> </span></p>
<p>The bureau's figures showed that although Australia's population is expected to age in a similar way to other developed nations due to a combination of longer life expectancy and lower fertility rates, the immigration programme helped to keep the median age steady at 37 years over the 2016 financial year.</p>
<p>What is clear from analysing the figures, however, is that the states and cities with stronger economies and employment prospects generally have more a favourable demographic outlook than those with rising or elevated unemployment rates.</p>
<p>For example, Tasmania's median age has spiked sharply from 35 to 42 years over the last two decades, as younger adults have chosen the path of interstate migration to the mainland in search of gainful employment.</p>
<p>And while some states saw solid growth in their working age population in 2016, including New South Wales (+1.0%) and Victoria (+1.7%), both Tasmania and the Northern Territory saw their working age populations decline.</p>
<p><strong>The wrap</strong></p>
<p>The picture is quite mixed around the states and cities, but projections show that over the next decade there will be more than three quarters of a million extra persons in the 31 to 40 age bracket, a huge demographic wave to drive new entrants into the housing markets.</p>
<p>That's not to say other cohorts won't expand too - in fact, the total population is projected to expand by a record 4.4 million over the next decade to 28.5 million - but the number of potential new entrants may possibly be the most important driver of demand.</p>
<p>For some reason it's only just dawning on people how population growth will impact traffic congestion in the largest cities.</p>
<p>As a result of this the next big run on housing markets is likely to be towards certain inner suburban locations with transport links at the expense of outer suburbia where infrastructure and jobs are sparse. </p>
<p><em><strong>PETE WARGENT </strong>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>. </em></p>
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The huge demographic wave to drive new entrants into the housing market: Pete Wargent

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<p>Huh, so much for the predicted 'disorderly rush for the exits'.</p>
<p>4.5 years of rising property prices later listing volumes and turnover rates have sunk to their lowest levels on record, as a percentage of total property stock. </p>
<p>Having executed its IPO, McGrath (ASX:MEA) provided the below chart as part of its Presentation to the 2016 Annual General Meeting.</p>
<div id="post-body-3609892557233707334" class="post-body entry-content">
<a href="/images/2016/11/25/MEA.jpg" target="_blank">Click to enlarge</a><br><div class="separator"><img src="/images/2016/11/25/MEA.jpg" alt=""></div>
<div class="separator"> </div>
<div class="separator"><span style="text-decoration: underline;"><em>Source: ASX: MEA</em></span></div>
<div class="separator"> </div>
<div class="separator">McGrath's diagnosis left little doubt as to the reason for this, being excessively high stamp duty costs.</div>
<div class="separator"> </div>
<div class="separator">It's a point I've visited here often before. </div>
<div class="separator"> </div>
<div class="separator">Stamp duty bands were designed with far, far lower dwelling prices in mind.</div>
<div class="separator"> </div>
<div class="separator">By consistently refusing to raise stamp duty and land transfer brackets authorities are effectively loading more and more up front tax on to property purchases (in addition to other taxes, such as rates and land taxes).</div>
<div class="separator"> </div>
<div class="separator">By effectively raising the stamp duty from a bit over 1 percent of the purchase price three decades ago to around 4 percent, the tax has gone from being a consequence or by-product of the transaction to an actual barrier. </div>
<div class="separator"> </div>
<div class="separator">No doubt the stamp duty windfall has been great for state governments and their overflowing coffers, particularly in New South Wales which has raised $8.6 billion in the last year alone and where we have net debt of less than zero for the first time ever. </div>
<div class="separator"> </div>
<div class="separator">Unfortunately, the high transactional cost of moving is predictably leading to 'asset lock in' and indirectly impacting labour force mobility.</div>
<div class="separator"> </div>
<div class="separator">Meanwhile investors remain wedded to their buy-and-hold strategies since if they choose to sell they get hit with capital gains tax (not that this stops unthinking 'think tanks' from campaigning for higher CGT). </div>
<div class="separator"> </div>
<div class="separator">As for non-residents, presumably some of them must sell but I've rarely come across it, probably because they purchase expensive new property and it can take years to break even on that type of stock with its inherent price premium (particularly now with the new levies on foreign buyers loaded on top of stamp duties, plus land taxes). </div>
<div class="separator"><strong><span style="text-decoration: underline;"> </span></strong></div>
<div class="separator"><strong><span style="text-decoration: underline;">Asset lock in</span></strong></div>
<div class="separator"> </div>
<div>Unsurprisingly capital city owners of houses now hold on to their houses for 10.7 years on average, way up from 6.7 years in 2005.</div>
<div> </div>
<div>Owners of apartments now hold for 9 years, well up from 5.9 years in 2005.</div>
<div> </div>
<div>The negative feedback look has become self-fulfilling, with so little stock available prospective capital city vendors are hesitant to list for fear of becoming locked out of rising markets. </div>
<div> </div>
<div>Due to low listing volumes, McGrath implied that we can expect to see low transaction volumes in FY17. </div>
<div> </div>
<div>
<p><span><em>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>.</em><br></span></p>
<p><em>His latest book is <a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank" rel="nofollow">Four Green Houses and a Red Hotel</a>.</em></p>
</div>
</div>
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Listings lowest on record says McGrath: Pete Wargent

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<h3 class="post-title entry-title">GUEST OBSERVER</h3>
<div class="post-header"> </div>
<div id="post-body-5220327253665162227" class="post-body entry-content">
<div>
<strong><span style="text-decoration: underline;">Headline immigration slows</span></strong><br><strong><span style="text-decoration: underline;"><br></span></strong>
</div>
<div>The January <a href="https://www.abs.gov.au/AUSSTATS/abs@.nsf/Lookup/3401.0Main+Features1Jan%202016?OpenDocument" target="_blank">Overseas Arrivals &amp; Departures</a> figures revealed that permanent immigration into Australia continued to slow into the beginning of 2016, with a net +268,400 permanent and long term arrivals now tracking more than a third below the peak.</div>
<div> </div>
<div>There were some 13,610 permanent departures in January, the highest on record, although ABS research shows that most "permanent" departures actually return to our shores within a year.</div>
<div> </div>
<div class="separator"><img src="https://3.bp.blogspot.com/-Nllm0CzUbOg/VtzVN9aLYzI/AAAAAAAAbsQ/j5EQ-HSsAYY/s640/ARR1.jpg" width="640" height="350"></div>
<br><div>The composition of immigrants continues to shift away from New Zealanders and Britons, and towards permanent settlers of Asian origin, now accounting for a record 57.7 per cent share over the past 12 months.</div>
<br><img src="https://4.bp.blogspot.com/-1w0a3JXsOt8/VtzVO6qsuFI/AAAAAAAAbsk/Ua4W6MM6LoA/s640/ARR6.jpg" width="640" height="350"><br><br><strong><span style="text-decoration: underline;">Record high 7.5 million arrivals</span></strong><br><br><div>Despite the soft headline figures those hoping for a significant decline in Australian population growth are likely to be disappointed, with the wider picture being that population growth will probably only slow from extremely strong to strong.<br><br>Indeed, after accounting for the rapid growth in student visas, total population growth in Australia is probably already rising again. </div>
<div> </div>
<div>In the year to January the number of short term arrivals blazed past 7.5 million for the first time in recording another strong +8.6 per cent rolling annual increase.</div>
<div> </div>
<div>The number of short term departures is still creeping up, but a much more sedate pace, implying an exchange rate driven rebalancing. </div>
<br><img src="https://2.bp.blogspot.com/-XRjxdNt05RE/VtzVN3S-ucI/AAAAAAAAbsY/SUn_byjPb0I/s640/ARR3.jpg" width="640" height="338"><br><div> </div>
<div>There was a huge increase in the number of holiday makers to Australia in the year to January of +442,000 taking the annualised total up to a fresh high of 3.57 million, while an additional +119,400 folk came to visit friends &amp; family, taking the total for this category up to a record 2.04 million. </div>
<br><img src="https://1.bp.blogspot.com/-bqgko3XUhEE/VtzVOrpQBMI/AAAAAAAAbsg/QSKZ6hUP6Gg/s640/ARR5.jpg" width="640" height="348"><br><div> </div>
<div>The key reason that population growth is unlikely to slow is the vast projected boom in international students. </div>
<div> </div>
<div>There were some 55,000 education arrivals in January, by a huge margin the biggest January on record, and it seems to be a nailed on certainty that 2016 will be the greatest ever year for the enrolment of international students. </div>
<div> </div>
<div>More relaxed visa rules mean that many thousands of these students will end up becoming permanent residents in time. </div>
<br><div class="separator"><img src="https://4.bp.blogspot.com/-MwGAtOVgnCU/VtzVN5KEkSI/AAAAAAAAbsU/BU61yN7ijtA/s640/ARR2.jpg" width="640" height="346"></div>
<div> </div>
<div class="separator">Last, but certainly not least, the explosion in visitors from China has virtually torn the roof off, with an astonishing +57.3 per cent increase from January 2015.</div>
<div> </div>
<div class="separator"><img src="https://3.bp.blogspot.com/-3RkQcEPt8YA/VtzVOttl-yI/AAAAAAAAbsc/JQFSsT-UH4w/s640/ARR4.jpg" width="640" height="348"></div>
<br><div>Naturally the most popular month in the calendar year for Chinese visitors will be February, due to the lunar year. The raw original data show that Chinese visitors in that month have ramped up at an astonishing pace:</div>
<div> </div>
<div><strong>Feb 2012 - 66,500</strong></div>
<div><strong>Feb 2013 - 110,400</strong></div>
<div><strong>Feb 2014 - 104,400 </strong></div>
<div><strong>Feb 2015 - 164,400</strong></div>
<div> </div>
<div>It seems likely that Febuary 2016 was another record-breaker, but we'll have to wait another month for the official confirmation of that. </div>
<div> </div>
<div><strong><span style="text-decoration: underline;">The wrap</span></strong></div>
<div> </div>
<div>The full suite of figures appear to tie with DIBP forecasts of population growth bottoming out at somewhere close to 300,000 per annum, before increasing strongly over the remainder of the decade.<br><br>It is important to note that most of the population slowdown has been in mining and resources regions - the largest capital cities have barely experienced any slowing at all to date.<br><br>Evidently the composition of immigration moving forward will be very different, with Asia being the key driver of population and tourism growth.<br><br>---<br><br>Chinese iron ore, coke and rebar futures have all hit limit up during today's trade, while crude might even get back to $40.<br><br>Nice to see. A few mining stocks are going ballistic. </div>
</div>
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Asian century tees off in Australia: 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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<p>The Foreign Investment Review Board released its <a href="https://www.firb.gov.au/content/Publications/AnnualReports/2013-2014/index.asp" target="_blank">Annual Report for 2013/14</a>, which made for interesting reading.</p>
<p>The most remarkable point of note was how accurately it conformed with expectations, coming in almost bang on - exactly in line - with previous guidance.</p>
<p>The 2014 Annual Report made history confirming that as expected China was by a huge margin the most influential investor in Australia with a thunderous $27 billion. </p>
<p>By way of comparison the nearest competitor was the US at just $17.5 billion.</p>
<p>Unsurprisingly the main destination for foreign investment was real estate at $74.6 billion, a massive $22.7 billion increase on the prior year.</p>
<p>And, as I <a href="https://petewargent.blogspot.com.au/2015/04/asian-capital-is-impacting-our-property" target="_blank">covered here last week</a>, proposed foreign investment in residential real estate did indeed more than double in fiscal 2014, from $17.2 billion to $34.7 billion.</p>
<p>Let's take a look at what this means for our property markets.</p>
<p><strong>All real estate proposals</strong></p>
<p>Across all classes of real estate, the number of proposals in 2014 was...whoa.</p>
<p><img src="https://2.bp.blogspot.com/-JKu1UBbT6PU/VULsRL9DabI/AAAAAAAAVAA/fX1bUkKJq-Q/s1600/FIRB1.jpg"></p>
<p>And the increase in real estate applications decided by value was...whoa!</p>
<p align="center"><img src="https://4.bp.blogspot.com/-sEg5HWgFv4g/VULsRP-2f4I/AAAAAAAAVAE/PgeZnmdEpc8/s1600/FIRB2.jpg"></p>
<p>Note that these figures include all classes of real estate.</p>
<p>This all forms part of a very real dichotomy for our real estate markets. </p>
<p>On the one hand competition from developers is adding <a href="https://petewargent.blogspot.com.au/2015/04/asian-capital-is-impacting-our-property" target="_blank">unprecedented upwards pressure on land values</a> in the largest capital cities, particularly after the signing of the China-Australia Free Trade Agreement (ChAFTA).<br><br> Developers from China, Hong Kong and elsewhere are consistently overpaying for sites in Sydney and Melbourne, inevitably pushing up prices.</p>
<p>On the other hand, we are seeing a resultant <a href="https://petewargent.blogspot.com.au/2015/04/asian-capital-is-impacting-our-property" target="_blank">boom in the number of high rise apartments</a> being approved, sold offshore and constructed, and this is set to put further downward pressure on unit rents.</p>
<p><strong>Residential approvals</strong></p>
<p>With regards to residential property specifically, both the number and value of proposals approved leapt dramatically in fiscal year 2014.</p>
<p><img src="https://4.bp.blogspot.com/-x0_SIgy8gms/VUXmHz67cUI/AAAAAAAAVCU/zEB3gzsc1Cg/s1600/FIRB.jpg"></p>
<p>A large proportion of approvals continue to be for assets of under $1 million in value.<br><br> If you check this blog back to its inception you will find that one of the chief reasons that I long ago picked out Sydney real estate as the out-performer was that I believed eventually the Aussie dollar must return from the stratosphere, and foreign investment would explode in Sydney and Melbourne.</p>
<p>The timing of currency movements and the impacts thereof are impossible to predict accurately; but that <a href="https://petewargent.blogspot.com.au/2015/04/asian-capital-is-impacting-our-property" target="_blank">time is now</a>. </p>
<p><strong>State by state</strong></p>
<p>Anyone with a working pair of eyes and a few frequent flyer air miles under their belt would know that Melbourne, Sydney and south-east Queensland see the overwhelming bulk of foreign investment in residential real estate. </p>
<p>New South Wales (39%) and Victoria (41%) accounted for 80% of foreign residential approvals by dollar value in 2014, with Queensland (11%) and Western Australia (5%) mopping up most of the remainder. South Australia accounted for just 0.4%.</p>
<p><img src="https://1.bp.blogspot.com/-8PC1ZKJp21Y/VUXmOaJ5AXI/AAAAAAAAVCc/i6ZFmCBcubc/s1600/FIRB1.jpg"></p>
<p>It is important to recognise that most of this investment in residential real estate was approved for new dwellings (11,338 approvals), rather than for existing property (7,915), vacant land (3,150), redevelopment (534) or developer approvals (103).</p>
<p><strong>By country</strong></p>
<p>Finally, as projected China has come from the borders of oblivion to be far and away the away the greatest foreign investor in Australian assets.</p>
<p>To be blunt, this could come as no surprise whatsoever to anyone who works in the industry, the ever-increasing volume of inquiries (both residential and commercial) forcing a few people over time to change their opinions, including myself.</p>
<p><img src="https://1.bp.blogspot.com/-rwPRoyniJyk/VUXmUih2nvI/AAAAAAAAVCk/3O7hzwiS56I/s1600/FIRB2.jpg"></p>
<p>China was by an enormous margin the biggest investor in real estate, manufacturing and mineral exploration, and will soon become the leading investor in Australian services industries too.</p>
<p>If you believe that this trend is going to tail off any time soon, think again.</p>
<p>After the signing of the ChAFTA, the behemoth Chinese Greenland Group stated that it sees "no ceiling" to the level of funds it is prepared to invest in Australia, with agriculture next on the hit list.<br><br> The commercial space is seeing a spate of enormous deals being written.<br><br> In the past year both the Hilton Hotel and the Sheraton on the Park in Sydney have both been taken out by Chinese investment groups Bright Ruby and Sunshine Insurer for Group $442 million and $463 million respectively, while Goldfields House at 1 Alfred Street in Circular Quay also went recently for $425 million.</p>
<p><strong>The wrap</strong></p>
<p>Approved foreign investment in residential real estate more than doubled in 2014 and will continue to play a huge role in Australia over the years ahead, driven predominantly by Chinese capital.</p>
<p>This is helping to drive a record increase in dwelling supply, albeit <a href="https://petewargent.blogspot.com.au/2015/04/asian-capital-is-impacting-our-property" target="_blank">largely of highrise apartments</a>.</p>
<p>Clearly the new dwellings market in the most populous capital cities is increasingly being shaped by offshore funds, and the trends by country present not-so-subtle hints as to what is happening in the established property market too.</p>
<p>There are now approaching 400,000 Chinese born Australians, and there around 1 million people in Australia of Chinese ancestry. </p>
<p>2014 also saw yet another huge increase and a <a href="https://petewargent.blogspot.com.au/2015/04/asian-capital-is-impacting-our-property" target="_blank">record number of Chinese short-term arrivals</a> at around 800,000.<br><br> More than 750 business investment visas have been issued to qualifying "Significant Investors" since 2012, most of them to wealthy Chinese as intended.</p>
<p>Multiple pathways - as well as the evident desire - clearly exist for foreign-sourced capital to find its way into established property too, and my view is increasingly that this is happening, particularly in Sydney, and probably Melbourne. </p>
<p>I expect if you asked others who work in property "at the coalface" in these two cities they would tell you the same.</p>
<p><em><strong>PETE WARGENT</strong> 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>.</em></p>
<p><em>His book '<a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank" rel="nofollow">Four Green Houses and a Red Hotel</a>' is out now.</em></p>
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Pete Wargent

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