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.

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.

<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.

The development will be delivered across two stages, with the first stage carrying an estimated gross realisation value of around $360 million.

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.

The residential mix will include townhomes, oversized two-bedroom apartments, substantial three-bedroom residences and four-bedroom homes.

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.

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.

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.

<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" />

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.

"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.

"With Gold Coast Airport on its doorstep, it also offers a level of accessibility that broadens its appeal across almost every market demographic."

The project comes as the southern Gold Coast continues to attract an increasing share of high-end apartment development and buyer activity.

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.

Mould said those characteristics had informed the approach MAYD and Cera Stribley had taken to the project.

"We've worked closely with Cera Stribley to create a vision that is deeply connected to its surroundings," he said.

"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."

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.

"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.

"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."

Cottam said the proximity to Gold Coast Airport was also proving increasingly important for interstate and second-home buyers.

"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."

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.

MAYD is targeting an early 2027 launch.

Joel Robinson

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

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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.

But despite that growth, the suburb has seen relatively few major new apartment projects brought to market over the past 18 months.

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.

[smartcode_project:default project_id=152737 project_image_fid=377679]

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.

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.

[smartcode_project:default project_id=152737 project_image_fid=377675]

Nova Rêve also represents a significant step up from the family's first apartment development, Grand Rêve, which was delivered nearby on Garthowen Crescent.

Grand Rêve introduced larger, house-like apartment layouts and premium inclusions including Wolf and Sub-Zero appliances to the Castle Hill market.

Nova Rêve takes that approach to a precinct scale, combining the residential component with hospitality, retail and substantial public and resident landscaping.

[smartcode_project:default project_id=152737 project_image_fid=377685]

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.

"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.

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.

It will include restaurants, cafes, skybars and all-day dining, alongside conference and event facilities catering to business functions, community groups and private events.

At ground level, more than 1,600 sqm of shops and cafes will open onto the surrounding streets and landscaped areas.

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.

[smartcode_project:default project_id=152737 project_image_fid=377680]

Reve Group's Romio Georges said creating an active ground plane had been central to the planning of Nova Rêve.

"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.

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.

More than 80 per cent of the apartments will occupy corner positions, with Turner responsible for both the architecture and interiors.

&nbsp;

[smartcode_project_cta:default project_id=152737]

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Nova Rêve arrives as Reve Group bets on Castle Hill's next growth phase

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.

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.

Construction has commenced, with completion currently estimated for late 2027. Three-bedroom residences are priced from $1.8 million.

[smartcode_project:default project_id=150999 project_image_fid=374005]

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.

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.

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.

[smartcode_project:default project_id=150999 project_image_fid=374010]

Resident amenity is concentrated at rooftop level, where landscaped entertaining terraces and pools take advantage of elevated views across Coolangatta and the Pacific Ocean.

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.

“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.

[smartcode_project:default project_id=150999 project_image_fid=374002]

“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.”

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.

[smartcode_project_cta:default project_id=150999]

Maréa Residences brings parkside apartments to Coolangatta

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.

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.

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.

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.

<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" />

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.

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.

A significant component of The One will be its residential amenity.

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.

The planning approval also incorporates a major upgrade of Queensbridge Square, which PDG will deliver in partnership with the City of Melbourne.

<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" />

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.

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.

“This is the most significant Planning Permit approval Melbourne has seen in recent years,” Giuliano said.

“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.”

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.

PDG has also started generating early interest in the residential component from owner-occupiers ahead of a planned public launch in early 2027.

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

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.

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.

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.

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.

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.

&nbsp;

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.

Wooloongabba has been popular for apartment developers, particularly since the announcement of the 2032 Summer Olympics games in Brisbane.

While there have been a lot of development applications, it has failed to materialize into real supply.&nbsp;

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>.

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

Pete Wargent

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Some surprising set of news last week as the <a href="https://www.abs.gov.au/AUSSTATS/abs@.nsf/Lookup/6202.0Main+Features1Aug%202014?OpenDocument" target="_blank" style="line-height: 1.3em;">Labour Force</a> data showed total employment leaping by an outlandish 121,000 in the month of August, the greatest net gain in the history of the data series which runs all the way back to 1978.
Most of the gains were of the part-time nature, reported full-time employment increased by 14,300 and part-time employment by 106,700.
Of course, the data represents only a survey and therefore the results are necessarily volatile and should not be taken too literally. The huge variance against expectations will do little to enhance the credibility of the survey's accuracy. 
In particular, the huge boost in part-time employment seems likely to be largely a result of sample rotation.
Nevertheless, such a large gain in employment must be reflective of at least some good news in the economy.
Total employment jumps
The total employment gain was welcome news after a weak result last time around.
 <img src="https://1.bp.blogspot.com/-mrUDmv8-6LA/VBFRgqPGO5I/AAAAAAAAPro/oo15o57A8KU/s1600/1.jpg"> 
Over the past year total employment has increased by 128,000 for females and 111,000 for males.
<img src="https://1.bp.blogspot.com/-moissCZGpvc/VBFRgi66JgI/AAAAAAAAPr8/OVCxMMeB5C8/s1600/2.jpg"> 
Zooming in the total employed chart to a five year time frame shows what a truly anomalous result the August gain was - a monster uplift in reported total employment.
Clearly the monthly data is noisy but the economy must be doing something right for total employment to continue its right to the highest level in Australia's history at more than 11.7 million.
<img src="https://3.bp.blogspot.com/-14IjNw0pFBw/VBFRg7s9OdI/AAAAAAAAPrs/AjYeEghJPR8/s1600/3.jpg">
Total employment by state
More interestingly, what is happening at the state level?
The month of August showed the New South Wales economy to be leading the way with a hefty gain in total employment (+45,000) albeit with the majority of that fueled by part-time employment gains.
Queensland (+27,000), Victoria (+26,000), South Australia (+17,000), Western Australia (+10,000) and Tasmania (+4,000) also each benefited to a greater or lesser extent in the month (question marks over the integrity of the data notwithstanding).
<img src="https://3.bp.blogspot.com/-GN3Spx7s4uQ/VBFRhimgcMI/AAAAAAAAPr0/hwSoPu1G1tU/s1600/4.jpg">
The cumulative jobs added by state chart below is very much a three horse race, with New South Wales, Victoria and Queensland leading the way, although over the past four years the momentum is all with Sydney.
South Australia and Tasmania (which I haven't charted here) have lagged badly for the past half decade although the August data proved to be reasonably good in both cases.
<img src="https://1.bp.blogspot.com/-MhkqMBWv83A/VBFRithdlQI/AAAAAAAAPsE/KbZu1n5prdY/s1600/5.jpg"> 
Sydney's economy currently stands to benefit from a major construction boom. Of course, as the boom is largely of the residential property nature, property owners would be wise to keep a watchful eye on oversupply risk.
Our latest data shows that on a city-wide basis the Sydney market remains relatively tight with a vacancy rate of only 1.8% which is well under the national and capital city average of 2.3%. Certain inner west and Canterbury-Bankstown suburbs have vacancy rates which are far lower again at below 1.5%.
However, there are some areas we do highlight as having significant oversupply potential, particularly for new apartment stock around the Central Business District, the inner south and surrounding some of the Urban Activation Precincts (UAPs). 
Caveat emptor.
This article continues on the next page. Please click below.
<hr class="system-pagebreak">
Unemployment rate by state 
Commentators reserved much of their scorn for the unemployment rate by state which continues to leap around in manic-depressive fashion. The national unemployment rate month dived from 6.4% to 6.1% on a seasonally adjusted basis, reversed much of the previous month's spike.
<img src="https://2.bp.blogspot.com/-GOXOvAT7sZ4/VBFRjkKTHHI/AAAAAAAAPsQ/2vC2IJ1GxP0/s1600/6.jpg"> 
This month threw out some particularly wild unemployment rate changes at the state level, but users of the data would be wise to observe the trend rather than the noise, which remains up, albeit on a somewhat shallower basis than previously implied.
<img src="https://1.bp.blogspot.com/-V990bDN0pLA/VBFRj4qFHNI/AAAAAAAAPsU/PZRIr7H_oBo/s1600/7.jpg"> 
The August data showed unemployment rate falls across the board with Western Australia (5.0%) and New South Wales (5.7%) recording the lowest rates.
The data recorded some enormous falls in August with South Australia and Tasmania in particular seeing a colossal drop in their respective unemployment rates despite an overall increase in the participation rate.
Lovely to see but most commentators will be unlikely to suspend their disbelief based upon one month of noise.
<img src="https://3.bp.blogspot.com/-PD8ceVilwFQ/VBFRkhOf-GI/AAAAAAAAPsg/wQw-kOPjzmY/s1600/8.jpg">
Summary and property market implications
A literally unbelievably good boost in total employment must at least mask some positive news in the wider economy, but of course we would want to see any trend confirmed over time rather than becoming too aroused by one rogue print.
Cash rate futures and currency markets responded with further interest rate cuts now totally priced out of the yield curve.
With monetary policy settings at the current level we of course have expected to see dwelling prices rising across Australia but there remain serious question marks as to how sustainable gains in this cycle can be in most cities and regions.
Sydney and Melbourne have been boosted by an apparent explosion in demand from offshore funds.
Commentators for some time have reported that Sydney's cycle is over with investor demand being pulled forward. What they failed to account for is that equity gains create new deposits, and we are seeing plenty of evidence of refinancing in order to clamber aboard the Sydney property bandwagon at the present time.
On the other hand, there will be no such explosion in demand elsewhere and hence no equivalent property boom, and this was backed up further by today's Labour Force report. Total employment has been trending down in the Northern Territory for the past five months while the 2014 employment data flowing out of Canberra has proved to be flatter than a gander's arch. The August employment data for South Australia and Tasmania was reasonably positive but the five year charts look dire. Meanwhile, Western Australia appears to be holding up reasonably well but is clearly a state in transition from mining construction to production.  Overall this property cycle possibly has a little way to run yet, but gains outside Sydney are likely to be relatively disappointing as compared to the property booms of Christmases past.
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pwargent-M4siyDbqQY

What does the 'unbelievable' boost in employment mean for the property market?

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Our <a href="https://petewargent.blogspot.co.uk/2014/08/population-growth-will-be-very" target="_blank">2014 population forecasts</a> showed that we expect to see something quite different in 2014, that being total population growth in Australia easing back quite significantly this year to closer to 300,000 than the near 400,000 we have seen previously. 
Further, we expect other demographic shifts, including centralisation of our capital cities (recently affirmed by the <a href="https://new%20south%20wales%20-%2050%2c000%20victoria%20-%2037%2c500%20queensland%20-%2035%2c000%20western%20australia%20-%2020%2c000%20south%20australia%20-%207%2c500%20other%20-%2010%2c000%20total%20-%20160%2c000/" target="_blank">Reserve Bank and another Grattan Institute report</a>) as well as a growing contingent of Asian settlers.
The overseas arrivals and departures data is a significant feeder into the population growth data, and recent figures further confirmed our expectations. 
Short-term arrivals and departures
Over the past half decade we have have had more short-term departures from Australia than short-term arrivals, a trend which continues:
<img src="https://1.bp.blogspot.com/-hA2Tcs1tcm4/VAgTxF99yuI/AAAAAAAAPgk/6SEpEVKdxF0/s1600/Arrivals1a.jpg"> 
The short-term arrivals data is interesting to the extent that it potentially gives us a sneak peak of the decade ahead. 
In this context, the massive boom in visitors from China is important.
On a rolling annual basis the number of Chinese short-term arrivals simply keeps on increasing breaking a new record high of more than 780,000 in the year to July 2014.
<img src="https://4.bp.blogspot.com/-_bmDWYGM4oI/VAgTwdfZrCI/AAAAAAAAPgc/vlQwHAmyv04/s1600/Arrivals1.jpg"> 
Long term arrivals and departures 
More interestingly, what is happening to long-term arrivals? 
Well, July was a very strong month with more than 70,000 long-term arrivals, but the rolling annual trend is down in line with our forecasts (recall that we are expecting considerably weaker population growth in 2014 - we expect massive population growth into Sydney and New South Wales, but figures easing back elsewhere).
<img src="https://1.bp.blogspot.com/-3MyN5HGsm4M/VAgTyfDNotI/AAAAAAAAPgs/D1ukn05iiFU/s1600/Arrivals2.jpg">
When viewed on a net basis set off against long term departures, a similar trend on a rolling annual basis with rolling annual net long term migration also easing back despite a strong month of long-term arrivals in July.
<img src="https://2.bp.blogspot.com/-rwqQXucpdkU/VAgT4-QUwuI/AAAAAAAAPg0/xDRLs55I57M/s1600/Arrivals3.jpg"> 
Settlers
As for where the settlers are coming from? 
In July we saw something of a landmark; for the first time we have more Indian settlers than Kiwis on a rolling annual basis. 
Poms are also following the UK economic recovery and fewer are arriving in Australia now as the British employment rate booms. 
Chinese and Indian immigration into Australia, on the other hand, is looking very strong.
<img src="https://4.bp.blogspot.com/-iJMwkRbP_Zg/VAgT_HP6GkI/AAAAAAAAPhE/vZON-IygFS8/s1600/arrivals4.jpg">
Finally, a chart which helps to explain the rising prominence of so-termed "Asian buyers" of Australian property.
Simply, since 2000 there has been a tremendous boom in the number of Asian immigrants, so it can hardly be a surprise to see more folk of an Asian appearance at property viewings and auctions - most of the so-called "Asian buyers" are actually Australian buyers of Asian heritage, a point which appears to be lost on the popular media. 
 <img src="https://1.bp.blogspot.com/-EqxVMeNbY7Q/VAgT8gTqM5I/AAAAAAAAPg8/MYxHKSjr_vg/s1600/Arrivals5.jpg">
Summary
Overall the data is consistent with expectations.  
We still see population growth easing back to nearer 300,000 than 400,000 in 2014, with Sydney to be a major beneficiary of the population growth this year. 
The mining states of Queensland and Western Australia have dimming prospects for population growth in 2014 as mining capex and interstate migration drops off, while South Australia's population growth will likely just be just weak, full stop.
Victoria's population growth will be softer in 2014 than in the prior year, but still should remain very strong in absolute terms. As a quick primer, here are our 2014 best estimates:
Natural population increase 2014 (f)
<ul>
<li>New South Wales - 50,000</li>
<li>Victoria - 37,500</li>
<li>Queensland - 35,000</li>
<li>Western Australia - 20,000</li>
<li>South Australia - 7,500</li>
<li>Other - 10,000</li>
<li>Total - 160,000</li>
</ul>
Total population growth 2014 (f) 
<ul>
<li>New South Wales - 105,000</li>
<li>Victoria - 87,500</li>
<li>Queensland - 60,000</li>
<li>Western Australia - 40,000</li>
<li>South Australia - 10,000</li>
<li>Other - 7,500</li>
<li>Total - 310,000</li>
</ul>
You can visit <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) or Pete's <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blog</a>.
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>' .
 
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The rise and rise of Asian property buyers

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Low interest rates working?
A survey of 23 economists this week showed all 23 of them to believe that the interest rate easing cycle is over, albeit few are expecting hikes any time soon.
A key reason for that is doubtless that lending rates have actually been falling independently of official cash rate decisions made centrally by the Reserve Bank.
Personally I still wonder whether this will be enough, particularly when viewed in the light of an iron ore price which has crashed by 35% in 2014 and a stubbornly high Aussie dollar.
On the flip side, there is some evidence to suggest that low interest rates are having an impact in other areas of the economy in spite if the declining terms of trade.
Consumer confidence is set to rebound above is long term average, retail sales are expected to resume their upwards trend by growing by 0.4% in July and yesterday's capex survey showed that away from mining and resources there are signs of life in the larger services sector of the economy.
For the time being at least interest rates will be stuck on hold until further evidence comes to light.
Financial Aggregates show investor credit growth
The Reserve Bank released its <a href="https://www.rba.gov.au/statistics/frequency/fin-agg/2014/fin-agg-0714" target="_blank">Financial Aggregates data</a> for July today which revealed that easy monetary policy is gradually impacting credit aggregates.
In the year to July 2014 total business credit has spluttered 3.4% higher and personal credit has increased by 0.8%.
Housing credit rose by another 0.5% in July to be a strong 6.5% higher over the year, clear evidence that cheaper credit is set to drive housing markets higher.
<img src="https://2.bp.blogspot.com/-qSVs1pstm5M/VAAwrYJI7sI/AAAAAAAAPYY/SAd8XWcGy5U/s1600/RBA1.jpg">
The gradient of the red line in the chart below shows that housing credit for investors has been outstripping that of credit for owner occupiers over the past year:
<img src="https://3.bp.blogspot.com/-hWwFikc_JCw/VAAwsYVrJII/AAAAAAAAPYg/Sy-4YfSPVKI/s1600/RBA3.jpg">
In terms of annual percentage credit growth the data shows that the housing credit growth rebound has been driven largely by investor credit which has increased by 8.8% over the past 12 months as compared to a 4.8% increase in owner occupier credit.
<img src="https://1.bp.blogspot.com/-pYUrXLAgWdM/VAAwsEDlyjI/AAAAAAAAPYk/cNgjgbqtpLs/s1600/RBA2.jpg">
When smoothed on a rolling annual basis below, the data becomes clearer with the red line denoting a strong uplift in investor credit.
Of course, percentage credit growth is nowhere near as high as it was in decades gone past, but since it is the transaction of dwellings at the margin which drive the market property prices have rebounded very strongly since 2012 and are heading higher still.
<img src="https://3.bp.blogspot.com/-ptfHOAYyNZE/VAAwsuAZcbI/AAAAAAAAPYo/s2lEJtX-e7A/s1600/RBA5.jpg"> 
As a percentage share of housing credit, investor credit has ticked higher again, now representing 33.8% of the total. Interestingly this is exactly the same percentage share of housing credit in the RBA's Financial Aggregates data that we saw a decade ago in July 2004.
<img src="https://2.bp.blogspot.com/-Be87eDNQd-k/VAAws0GGdvI/AAAAAAAAPYs/X4lMYebEjYs/s1600/RBA6.jpg">
Outperforming property types and location
The data continues to imply to us that the property types which will ultimately outperform in this cycle include those which are strongly favoured by investors, particularly well-located properties in Sydney. 
Our previous analysis of rolling 12 monthly investor loans by state has clearly shown that Sydney will be the king of price growth in this period of the cycle:
<img src="https://2.bp.blogspot.com/-8H-Co34r7zk/VAA3WW0QA9I/AAAAAAAAPZQ/34ZBTeQKW9A/s1600/LENDING.jpg">
When you factor in the increasing demand from offshore or Australian real estate which is not well captured in reported data, the bias in favour of Sydney becomes all the more compelling.
The latest statistics from <a href="https://www.rebonline.com.au/blog/8077-what-do-china-s-real-estate-bosses-really-think-of-australia?utm_source=Real+Estate+Business&amp;utm_campaign=Real_Estate_Business_Bulletin29_08_2014&amp;utm_medium=email" target="_blank">Juwai</a> denoted that the favourite locations for Chinese buyers fall in the following order: Sydney, Melbourne, Brisbane. Perth and the Gold Coast.
As the terms of trade have declined dramatically we expect the Australian dollar to fall further from its current elevated point, which may drive significant further demand from offshore.
In this property market cycle, we are following that demand and have thus focused on Sydney real estate. 
Recent property market forecasts from analysts have suggested that the currently property market cycle has another two years to run which fits in tidily with what we have heard from major developers. 
BIS Shrapnel recently forecast price growth of 6 percent per annum for Sydney apartments through to 2016.
You can visit <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) or Pete's <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blog</a>.
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>' .
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Which property types and locations are overperforming?

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It gets rather tiring reading the commentary on UK house prices from people who have clearly never been here, less still have a modicum of ability to interpret data.
The latest angle has been that London prices have 'crashed' due to a monthly movement in Rightmove's asking price index.
Well, no.
For one thing, even Rightmove themselves warned that their asking price index is volatile and treated with caution, and particularly so in August historically, (not to mention that the very same index increased by well over 10% in October, which should tell you everything you need to know about its reliability on a month to month basis). 
In short, we see the London market cooling back a little over the next 12 months. 
Investors who want to outperform should look at a couple of our recommended suburbs including a couple of those set to benefit from the construction of the Crossrail project.
Away from London the market has never really gotten that hot post financial crisis, and in many areas is actually still very flat, with stock turnover very slow.
Anyway, back in the real world, here's the latest data from the <a href="https://www.ons.gov.uk/ons/rel/hpi/house-price-index/june-2014/stb-june-2014" target="_blank">Office for National Statistics</a> (click chart):
<img src="https://3.bp.blogspot.com/-qWQbQphzoEw/U_bqbsfrLAI/AAAAAAAAPTU/hfcpKOmMhSM/s1600/ONS%2BHPI.jpg">
London is denoted by the red line, recording the highest growth in the nation. 
Key points:
<ul>
<li>"UK house prices increased by 10.2% in the year to June 2014, down from 10.4% in the year to May 2014.</li>
<li>"House price annual inflation was 10.7% in England, 3.5% in Wales, 6.0% in Scotland and 4.9% in Northern Ireland.</li>
<li>"House prices are increasing strongly across most parts of the UK, with prices in London again showing the highest growth.</li>
<li>"Annual house price increases in England were driven by an annual increase in London of 19.3% and to a lesser extent increases in the South East (9.7%) and the East (7.9%).</li>
<li>"Excluding London and the South East, UK house prices increased by 6.3% in the 12 months to June 2014.</li>
<li>"On a seasonally adjusted basis, average house prices increased by 0.5% between May and June 2014."</li>
</ul>
Northern Ireland to reinflate a housing bubble?
The ONS data for Northern Ireland (NI) shows that its house prices are up 4.9% on a year ago raising the interesting question of whether the country will repeat any of the same mistakes of the last decade. It seems unlikely that price will be allowed to run upwards unchecked as they were through to 2007. At the peak of the bubble in June 2007, NI house prices had increased by 55.9% in only a year before eventually reversing.
The worst year in NI was the year to June 2009 when prices fell by 23% in only 12 months, before falling further through 2010 to 2012.
 <img src="https://1.bp.blogspot.com/-Y27_XtDuFJ0/U_bzwrhFSvI/AAAAAAAAPTk/yCbsZfbASeY/s1600/ONS%2BIreland.jpg">
Despite claims to the contrary, London is a very different proposition. 
Quite apart from being a major international financial centre, with a population of more than 8.3 million the ratio of new housing stock to established in such a large city remains immaterial and thus limited in its impact on the market.
The population of Belfast by contrast is only 280,000, so a boom in levels of construction can have a marked impact on housing market economics.
Ireland experienced a perfect, self-perpetuating housing bubble storm of full employment, booming prices and massive overbuilding. 
London has the opposite problem after years of woefully inadequate construction despite rapid population growth.
UK property 'bubble'
I've been back in my home city of Sheffield in Yorkshire the past couple of days.
Listening to some overseas commentary about the UK market, you'd think the property market across Britain was apparently in a bubble. 
Yet surely only someone who doesn't know the meaning of the word could describe the ex-London UK housing market as a bubble.
Speculative mania? Uncontrollable credit growth?
Prices have gone absolutely nowhere for more than seven years - backwards in many cases - and this through a period when inflation has been romping along at a 5% pace at times. In real terms, prices are way down in regional markets across England.
<img src="https://3.bp.blogspot.com/-J_yxXhZKh4I/U_fLUZ53MvI/AAAAAAAAPUY/OfNyv7rNqF4/s1600/UKHPIexlondon.jpg" style="line-height: 1.3em;">
The truth of the matter is that away from London and the south-east most housing markets remain painfully slow. Much of the same housing stock which was for sale when I was over here a year ago and the year before that still remains for sale.
This is a key reason why I don't invest in regional markets. Property is an illiquid enough asset as it is without compounding matters by investing in thin markets where demand is low.
Australia will get a sharp downturn one day, and when we do illiquid, depreciating assets will prove to be very painful for some investors who want to sell.
Being back in Sheffield in northern England it has been very notable how developments like the Hallam Tower have not progressed one iota in more than 10 years, and this is a site with the most spectacular views across the city.
The <a href="https://www.theguardian.com/artanddesign/the-camera-eye/2014/mar/05/park-hill-sheffield-utopian-estate-left-to-die" target="_blank">Park Hill redevelopment</a> has progressed a little over the past decade but much of it is still derelict.
A property bubble? Hardly. Britain's housing market is very much a case of London and the south-east versus the rest.
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Sydney property market...bazinga
We've been suggesting for a couple of years now that low interest rates will keep property investors hammering the Sydney property market, and it's certainly been the case that interest rate cuts have had a marked effect on market activity through recent cycles. 
The chart below shows the correlation between the first rate cut of the most recent easing cycles and auction clearance rates. Through September and October 2008 the official cash rate was cut from 7.25% to 6%. And then in November 2011 the cash rate was cut to 4.50%, heralding the beginning of the latest cycle. You can see below the reaction of Australia's major property markets.
 <img src="https://pbs.twimg.com/media/BvMWrGmCQAA3V24.jpg:large">
For months commentators have been suggesting that the market is fading, but we have had to agree to disagree. Au contraire, with the cash rate now at only 2.50%, demand from investors in particular is exceptionally strong and rising. If you have been following the data, you will know that investor finance in New South Wales is going through the roof.
<img src="https://2.bp.blogspot.com/-HDjRCgTH1rU/U_j2UpeZ7SI/AAAAAAAAPUo/2O_S4n_uoBM/s1600/Lending%2BFinance.jpg">
There is also a theory that investors in the Sydney market have been "pulled forward" and therefore the market has been overdue to reverse. 
Perhaps yes to some extent, but in reality rising dwelling prices in Sydney have created more equity for redraw, low interest rates have led household savings higher allowing potential investors to employ more leverage...and if the Aussie dollar slides further then more foreign capital may find its way into the Sydney and Melbourne markets too.
Weekend - auctions booming
Anyways, it was an absolute rip-snorter of a weekend of auctions despite the rain.
 <img src="https://2.bp.blogspot.com/-pTJtvcW1wYY/U_j49q5WbUI/AAAAAAAAPU0/H43d2jWt1Qk/s1600/BRAD.jpg">
Australian Property Monitors recorded a thumping preliminary auction clearance rate of 83.4%, with the trend over the past five weeks one of a strengthening market as we move towards spring.
<img src="https://1.bp.blogspot.com/-TnANmsToDuw/U_kXfUHs2yI/AAAAAAAAPVQ/simOIqaMAKk/s1600/AU1.jpg">
Source: Australian Property Monitors.
RP Data, which typically records a lower result, came in at 75.8%.
No slowdown there. As for where the market is really firing...one of our favourite suburbs of the past five years just keeps on going, recording a perfect 100% clearance rate this weekend...
<img src="https://1.bp.blogspot.com/-ZRRJ6sETWA4/U_j604fYMgI/AAAAAAAAPVA/knswQxUc8G8/s1600/ERKO.jpg">
You can visit <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) or Pete's <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blog</a>.
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>' .
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What we can learn from the UK property 'bubble'

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One of the best pieces of advice I've received as a property investor is to "follow the jobs growth".
Australia is in the midst of a significant structural shift towards knowledge and services based industries and the data shows that increasingly jobs growth, population growth and economic output is flowing to the centre of our major capitals.
With just over 60% of Australia's population located in the five largest capital cities it might seem reasonable to expect that around 60% of jobs created would be in those five largest capital cities too.
However, this is nowhere near being the case as this week's <a href="https://www.abs.gov.au/ausstats/abs@.nsf/mf/6291.0.55.001" target="_blank">Detailed Labour Force</a> data from the Australian Bureau of Statistics confirmed.
Over the years our analysis shows that jobs growth has been much stronger in the five largest capital cities at well over 70% of the total for their respective states.
And over the past five years, of the jobs growth in New South Wales, Victoria, Queensland, Western Australia and South Australia, some 77.4% of the jobs added have been in the capital cities, with only regional Queensland contributing significantly.
Not only is there a structural shift afoot in favour of capital cities and centralisation, our analysis of the data below shows that the trend is actually now accelerating.
Full-time employment growth
Looking at full-time jobs growth over the long-term we can see that while regional New South Wales has added jobs until relatively recently, the overwhelming majority of employment growth has been in the capital cities:
 <img src="https://3.bp.blogspot.com/-dt8z9s3UOG4/U_B05mGAQMI/AAAAAAAAPQ4/9Tm5vYiGNrM/s1600/a.jpg">
In the other states we expect to see something similar playing out, with one exception: Queensland.
Queensland is home to some large and growing conurbations outside Brisbane including Gold Coast/Tweed Heads, Sunshine Coast, Cairns, Toowoomba and Townsville, for example, and as such the rest of state figures for Queensland have tracked relatively strongly. Not so elsewhere...
 <img src="https://3.bp.blogspot.com/-1tKh0E-aoNw/U_B07TRQUcI/AAAAAAAAPRU/_i04FRUITmA/s1600/b.jpg">
Total employment growth 
In recent times many jobs added are not of the full-time variety and therefore we have run the same charts for total employment growth over the long run. Note that regional Victoria has added more part-time jobs, but still it is the capital cities which overwhelmingly lead the way.
 <img src="https://2.bp.blogspot.com/-uHIgsX1gC1g/U_B03-q19FI/AAAAAAAAPQo/p3i7sUidN8E/s1600/1.jpg"> 
And it's a similar story in the other states. 
 <img src="https://1.bp.blogspot.com/-AxBZkLXhp2k/U_B04C2vmyI/AAAAAAAAPQk/YJCm3-l5Buo/s1600/2.jpg"> 
These figures are sometimes easier to interpret in a column chart, and here the evidence in favour of Australia's increasing dependence upon its capital cities for total employment growth and prosperity is compelling (click chart):
 <img src="https://3.bp.blogspot.com/-GpnmuqCiJ3c/U_B04DvW1aI/AAAAAAAAPQg/bsf_ncP_K1M/s1600/3.jpg"> 
We note that jobs growth in regional Australia has stalled, and with the mining construction boom transitioning into the production phase, this trend is likely to become worse rather than better.
Unemployment
Finally, we note that employment growth is not yet occurring fast enough in this cycle to offset population growth in the capital cities and thus the trend in unemployment is up.
 <img src="https://2.bp.blogspot.com/-d5ufWNhUMmM/U_B05okGE_I/AAAAAAAAPRA/yXtI3XyDhvM/s1600/5.jpg"> 
Our analysis of population growth in the 'rest of state' regional areas over recent years has shown the growth in regional population to be comparatively weak, and therefore unemployment should not be rising. However, regional jobs growth in Australia has almost totally stalled and the the recent unemployment trend is therefore still up in most cases. 
 <img src="https://2.bp.blogspot.com/-d5ufWNhUMmM/U_B05okGE_I/AAAAAAAAPRA/yXtI3XyDhvM/s1600/5.jpg">
In short, the capital cities are increasingly becoming the job and population growth magnets, and as the data continues to show, this is becoming more and more so the case as the years progress.
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Structural shift towards capital city employment accelerates

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2013 was a stonking year for population growth with the Aussie population increasing by 396,200 persons, with particularly strong population increase in New South Wales (+110,300), Victoria (+107,900), Queensland (+79,700) and Western Australia (+71,300).
However, our analysis shows us that the population growth figure in 2014 will be weaker - and in some states considerably weaker - and we believe that the final population growth figure this year is likely to be closer to 300,000 than 400,000.
In particular, a number of states are in a significant population growth downtrend which we'll explore in more detail below, following last week's <a href="https://www.abs.gov.au/AUSSTATS/abs@.nsf/Lookup/3401.0Main+Features1Jun%202014?OpenDocument" target="_blank" style="line-height: 1.3em;">Overseas Arrivals and Departures</a> release from the Australian Bureau of Statistics.
Short-term arrivals record high
As a first point of interest, the number of short-term overseas arrivals in Australia has hit record heights and may soon even be approaching 7 million on a rolling annual basis.
This is of significant consequence over the longer term as Australia becomes an increasingly popular country of choice for visitors and probably long-term settlers too.
 <img src="https://4.bp.blogspot.com/-u9v2IgwH1OM/U-US6ks0g5I/AAAAAAAAPFo/KwBbT8BNFhU/s1600/1.jpg">
Long-term arrivals easing 
The number of long-term arrivals in Australia has pulled back to a rolling annual level of just over 700,000, after hitting a record high of more than 790,000 last year.
The monthly figures have shown quite a significant pullback since February suggesting that we are now in an entrenched downtrend of long-term arrivals.
<img src="https://1.bp.blogspot.com/-cTyvPDQPPAs/U-US60USjZI/AAAAAAAAPF0/ryT2mXLqN98/s1600/2.jpg">
When offsetting long-term departures this equates to rolling 12 monthly net long-term overseas migration of just over 370,000 persons, which is approximately 10% lower than the peak levels seen in Australia. 
 <img src="https://4.bp.blogspot.com/-axv04E8mtvQ/U-US65ZHHPI/AAAAAAAAPFs/V0yJ2T52UzY/s1600/3.jpg">
When throwing in the natural rate of increase in Australia as well as other short-term movements, this shows us that we will still experience strong population growth in 2014 at about double the long-term average, but the levels will be quite some way down on what we saw last year.
Settlers by country of birth - fewer Poms and Kiwis 
One of the interesting standout demographic trends to note that Brits and and New Zealanders are rapidly pulling the pin on migrating to Australia, with the numbers continuing to decline.
On the other hand, the number of settlers from China and India has been picking up strongly, which could become a significant structural change in our demographic make-up.
<img src="https://4.bp.blogspot.com/-T36_2fjzT14/U-UTCay_QBI/AAAAAAAAPGA/-Wdfvd9JnXQ/s1600/4.jpg">
Asian buyers
There have been countless inciteful comments over recent times about "Asians buying our homes"; "Asians taking our jobs" etc...plus ça change.
I thought I'd run the below rolling 12 monthly chart of settlers by continent over the long run to underscore an important point - over the past decade the "Asians" which people are fingering are often in fact Australians. 
The statistics show that Australia is increasingly becoming a country with a population of Asian heritage, and contrary to the widespread beliefs spouted on the internet, not all Aussie-Asian migrants hail from China!
 <img src="https://4.bp.blogspot.com/-aDvwBLU8Uxk/U-UTDt_LDOI/AAAAAAAAPGQ/fyxF-RwnlWs/s1600/5.jpg">
Splitting it down a little, it's clear that the Asian migrants come from all over Asia, although it's true that the increase in immigration from NE Asia and South/Central Asia is largely a result of increases from China and India in particular.
 <img src="https://3.bp.blogspot.com/-pOQQoFJ_Xg8/U-UTCb1AgiI/AAAAAAAAPGE/0n04hIYG3tY/s1600/6.jpg">
Population growth will be very different in 2014
Population growth in 2014 will be very different from what a number of commentators seem to be expecting.
While the numbers jump around a bit and it is not possible to forecast with a high degree of accuracy, projecting forward the trends from previous <a href="https://www.propertyobserver.com.au/https://www.abs.gov.au/ausstats/abs@.nsf/mf/3101.0" target="_blank">ABS Demographic Statistics</a> releases suggests something quite different for 2014.
Natural increase in 2014
Natural increase in population we might reasonably expect to remain fairly steady as compared to 2013 at approximately 160,000, implying that this segment of growth will be most heavily focused on the more populous states.
For 2014, we might expect to see natural increase of something in the region of:
New South Wales - 50,000
Victoria - 37,500
Queensland - 35,000
Western Australia - 20,000
South Australia - 7,500
Other - 10,000
Total - 160,000
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Net overseas migration and interstate migration in 2014
NSW
Net overseas migration has been very, very strong in New South Wales (i.e. Sydney) and has been tracking very solidly at around 70,000 per annum. 
After allowing for adverse net interstate migration of -15,000, New South Wales appears likely to see population growth in 2014 of around 105,000, which is exceptionally strong.
VIC
For Victoria, with the rate of net overseas migration having slowed in December 2013 and unemployment rising to 7% seasonally adjusted, we expect net overseas migration plus net interstate migration to be slower at approximately 50,000 in 2014, leading to a total state population growth for 2014 of 87,500.
QLD
Queensland is a major beneficiary of net interstate migration seeing +7,000 in 2014 which we may expect to continue. 
However, net overseas migration to the sunshine state dived in the December 2013 quarter. It's not yet clear whether that was a rogue print or the beginning of a trend. 
The slowing of total net overseas migration to Australia over the last six months suggests that it could be the latter, in which case total population growth could slow to around 60,000 in 2014 from nearly 80,000 in the prior year (generally, we take the conservative projections here).
SA
Net overseas migration also dived in South Australia in December 2013 and the state also suffers from a 'brain drain' and adverse interstate migration via a of around 4,000 per annum. 
We therefore project that total population growth in South Australia will be weak in 2014, at around 10,000 per annum. WA
Previously strong interstate migration to Western Australia had dried up almost completely by the end of 2013.
Meanwhile net overseas migration is likely to pull back in 2014 quite significantly as the mining boom peaks - we expect significant declines from 45,000 in the prior year, to perhaps only half of that figure in 2013. 
This is a highly unpredictable figure to estimate, but Western Australia's population growth, which was rampant in 2013 at 2.9%, could potentially dive to as low as 40,000 this year.
Other
And you can essentially throw a blanket around the rest, with the other states adding perhaps 7,500 persons between them.
Total Australia 2014
Totting that up, we could see:
New South Wales - 105,000
Victoria - 87,500
Queensland - 60,000
Western Australia - 40,000
South Australia - 10,000
Other - 7500
Total - 310,000
Clearly these figures will not be accurate, as they cannot be, but they are the best projections we can come up with given the available information and it will be interesting to see how the 2014 actuals track once they begin to roll in.
Where will the population growth happen?
Finally, where is the population growth actually take place?
Please do not be head faked by commentary which suggests that the cities are becoming less centric in nature, because they are not. In fact, all of the available evidence proves precisely the opposite is true. 
The major cities are becoming "self sustaining job magnets" and the population growth is taking place increasingly in inner and middle ring suburbs of the four major capitals, while regionally population growth is lagging badly.
<img src="https://www.rba.gov.au/speeches/2014/images/sp-so-150514-graph5-small.gif" alt="Graph 5: Population Density (Persons per square kilometre, 2011)">
Note how the change in population density was becoming ever more centrally focused over the half decade to 2011.
<img src="https://www.rba.gov.au/speeches/2014/images/sp-so-150514-graph9-small.gif" alt="Graph 9: Change in Population Density">
And jobs density shows the same picture.
<img src="https://www.rba.gov.au/speeches/2014/images/sp-so-150514-graph4-small.gif" alt="Graph 4: Job Density">
As was the change in jobs density from 2006 to 2011, which was ever more closely focused on the large city centres.
<img src="https://www.rba.gov.au/speeches/2014/images/sp-so-150514-graph8-small.gif" alt="Graph 8: Change in Job Density">
The result of this is that house prices continue to rise faster in suburbs closer to the city centres, and particularly in the lager cities.
All of the available evidence could not be more clear on this point.
<img src="https://www.rba.gov.au/speeches/2014/images/sp-so-150514-graph11-small.gif" alt="Graph 11: House Price Gradient">
Meanwhile small cities and regional centres are now struggling because the great household debt binge which ran for 15 years from the early 1990s has long since finished circa 2006.
If you want to source capital growth in this modern, post-GFC era of record low borrowing rates and increased foreign buyer desire to store wealth in prime location real estate, look to inner suburbs of the largest cities.
This has always been my viewpoint because I learned a huge amount from my experiences in a more mature city (London).
However, since I may suffer from confirmation bias, I would urge readers to consider what independent studies from the <a href="https://petewargent.blogspot.co.uk/2014/05/rba-on-housing" target="_blank">Reserve Bank of Australia (RBA) have found</a>. And for that matter, consider what the <a href="https://petewargent.blogspot.co.uk/2014/07/x" target="_blank">Grattan Institute</a> found as well.
Very conclusive indeed.
You can visit <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) or Pete's <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blog</a>.
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>' .
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Major cities becoming "self sustaining job magnets" as national population growth eases

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I noted recently how I was bemused that investment advisors have recommended buying property in mining towns.
Looking back, I said that my view is that this is "madness" - in retrospect an unfortunate choice of word - perhaps "foolhardy" would have been a better choice.
Anyway, this morning I received <a href="https://www.realwealthaustralia.com/helensrant10/?inf_contact_key=ffcf5f9e4758af6d591bf4ff40ea780457b7c97853867205df134e8795369d5e" target="_blank">this podcast</a> in my inbox from Real Wealth Australia which went even more to the point:
"The mining industry is over. Resources is over. People buying in those towns...it's just insane".
Clearly, I agree that it's necessarily a very smart idea to speculate in mining town property, right down to the misuse of inappropriate terminology. 
But what really left me scratching my head was it that was Real Wealth Australia that was <a href="https://www.realwealthaustralia.com/wp-content/uploads/2011/10/Boom-Suburbs-Report.pdf" target="_blank">recommending mining town property in the first place</a>.
What I can't for the life of me fathom is what has changed to cause the reversal in viewpoint.
It surely can't be the peak in mining investment as the construction boom gets set to recede, since that has been well known about for years and well documented all over the press and the internet.
 <img src="https://4.bp.blogspot.com/-9Pqa-8BsmR0/U997X63Pn-I/AAAAAAAAO8A/n9lnWTaKeoE/s1600/New+Capex.jpg">
In fact my former employers Deloitte have been <a href="/expert-insights/investing/mining-led-construction-boom-to-peak-in-2014-deloitte">warning about the forthcoming peak of the mining boom</a> for so long that it had become something of a point of general amusement and occasional mirth in certain media circles.
And it certainly can't be the reversion of commodity prices which has caused the shift in viewpoint, since I don't know of anyone who seriously believed that Australia's terms of trade could remain so grossly inflated against their long-term averages.
It wouldn't make any sense to have based any strategy on such a hugely obvious anomaly. 
 <img src="https://2.bp.blogspot.com/-0C_iq1IhY9Y/U998A5a3tBI/AAAAAAAAO8I/rlG4KQyjO7c/s1600/Commodities+1.gif">
Of course commodity prices globally are somewhat unpredictable and, for example, the copper spot may eventually rebound as the global economy recovers and should demand from Asia remain strong.
But the fact of the matter is that the RBA's index of commodity prices is heavily weighted towards Australia's bulk commodities (iron ore, thermal coal, metallurgical coal) which account for 56% of the index. If they tank, so does the index.
 <img src="https://2.bp.blogspot.com/-PSyrMswZZAM/U998BOKVkWI/AAAAAAAAO8M/YrWuaj9nRes/s1600/Commodities+weighting+2.jpg">
The iron ore price has taken a shellacking this year, but again it seems highly unlikely that anyone could have believed that a price which had run up from $1 per tonne to $180 per tonne in a decade could ever be sustained. 
Even now back down at around $95 per tonne, there are plenty who are arguing the spot price must revert towards its longer term average.
<img src="https://3.bp.blogspot.com/-AT1Gt2UVys8/U999LYzMJ8I/AAAAAAAAO8c/6U7a_9asx6g/s1600/Iron+Ore+price.jpg">
So I'm basically stumped. 
The transition from construction phase of the boom to production phase is the only thing I can come up with, but even that has surely be known about for years.
Property investment can be a very effective long-term strategy and act as an inflation hedge if you invest in landlocked suburbs of capital cities which have growing populations.
This is because new dwellings must be constructed to house the new population and new houses must always be built in today's dollars and at today's labour and materials costs.
However, when people focus on the cash-flow element of property as being more important than the basic fundamentals they can get themselves into a real mess, because they are trying to wrench investment property into something it's not meant to be (i.e. an income asset).
If income today is your primary focus, residential property is the wrong asset class. 
I saw this first-hand in Britain when investors who focused on yield at the recommendation of seminar promoters were buying in small towns in the north-east or the Potteries before the financial crisis.
Prices crashed to zero in some extreme cases (and if you're going to buy regional, it's post-crash that you should buy). 
Mining towns sit right at the top of the risk spectrum - frankly, they never were a very good idea for most investors, and they certainly aren't right now. 
You can visit <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) or Pete's <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blog</a>.
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>' .
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Is it "insane" to invest in mining towns now? Well, it was never a good idea in the first place

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Golf was an utter obsession for me as a teenager, the blistered hands testament to the fact that my mates and I would think nothing of playing 36 or even 54 holes in a day through the school hols.
At my best I was a single figure handicapper, which may sound impressive if you're a high handicapper, but in reality given the endless summers spent out on the course or on the practice range, I probably should have gotten lower. Upon heading off off to uni to study there was far less time to dedicate to the game and I was frustrated to see the junior pros from our club improve and overtake me - golf is a terribly unforgiving sport to those who do not practice. 
The moral of the story is that if you can't be the best at something, then you should just quit and give it up. 
Here are five golfing analogies for investors I picked up from watching the British Open...
<ul>
<li>Discipline</li>
</ul>
My teenage mates and I were always thrilled by watching John "Wild Thing" Daly play golf with his "grip it and rip it" mantra. 
An eccentric anti-establishment character, Daly drove coaches and administrators to distraction with his non-conformist behaviour, and against all the odds won two major championships including the British Open itself at the home of golf, St. Andrews.
As young lads, Daly appealed to our young male egos. He belted the golf ball a proverbial mile with his 'Killer Whale' driver and a bit like us he was rebellious, drank lots of beer and had a terrible haircut.
As a general rule, though, major-winning golfers are not like John Daly. 
Ian Woosnam reportedly enjoyed a pint, and some golfers periodically over-indulge in food or other 19th hole pleasures, but most pro golfers at the peak of their game are relatively fastidious in their discipline and detailed preparation
Routine, preparation, discipline.
Discipline is the first rule of successful investment. 
Take the stylised example of a person aged 25 who earns $50,000 per annum and receives annual pay increases of 3.5% through their working career. 
Thanks to compounding growth, even at only 3.5% annual pay increases their total cumulative gross earnings could be far, far higher than you might intuitively expect.
<img src="https://4.bp.blogspot.com/-WuK1fnaEnrs/U9Kkn99EGLI/AAAAAAAAOwU/M7QG0nufC5w/s1600/1..jpg">
It's not fashionable to say so, but wages growth has outpaced inflation for years in Australia across all income brackets, and on average folk have <a href="https://petewargent.blogspot.co.uk/2013/05/fishers-money-illusion" target="_blank">more disposable income</a> than in years gone by. 
It takes a level of commitment and discipline, sure, but the fact of the matter is that most people with a full-time job should be able to save and invest something for the future.
You tend to make some enemies pointing this out, but there's nothing like living in a Third World country for a couple of years to change your perspective and realise just how blessed we are to live in a country of abundant wealth such as Australia. 
The first rule of investing is to establish the discipline to spend less money on junk that we don't need and set aside money to invest.
One of the scariest things about working in professional practice where there are many high income earners is seeing people work for decades yet setting aside nothing for the future (often in Britain, not even a pension contribution).
Article continues on the next page. Please click below
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<ul>
<li>Sacrifice</li>
</ul>
In a similar vein, the greatest golfers through history have made huge sacrifices to reach the top echelons of the game.
Instead of idolising John Daly or the eccentric genius of Severiano Ballesteros, in hindsight as youngsters we should have been learning from the unstinting work ethic of the single-minded Sir Nick Faldo.
From a very young age Faldo was driven by a "quest for excellence", and dedicated countless thousands of hours to being the finest and most thoroughly prepared player that he could be. 
A golfer of incredible mental fortitude, Faldo took the unthinkable step for an Order of Merit winner of remodeling his swing under the watchful gaze of David Leadbetter in the mid-1980s. 
After enduring several frustrating years in the relative wilderness, the brave step paid dividends and Faldo went on to win no fewer than six major championships, becoming a true golfing great and fulfilling his quest for excellence.
Outstanding results in all spheres almost always require sacrifice and a willingness to go the extra mile. 
<ul>
<li>Patience</li>
</ul>
At the major championships, pro golfers aim to get themselves into contention by keeping the ball in play and making few costly errors, perhaps looking to pick up a few birdies on the par five holes.
As a rule, professionals don't go out on to the course aiming to shoot a 62, instead they focus on playing the percentages, approaching each shot in isolation and playing every situation on its merits.
Golfing legend and eight-time major winner Tom Watson aged 64 incredibly recently shot his age - a round of 64 - by applying precisely this disciplined approach.
If a player is on course to miss the cut towards the end of the second round they may take a few more calculated risks, but generally major championship golf is a percentages game and being too aggressive can backfire.
Golf psychologists therefore tend to use phrases like "control the controllables", "routine, routine, routine" and "beat them with patience". 
I recall the junior golfers at our club frequently annoyed senior members by knocking them out of Matchplay events where points are awarded for winning individual holes, yet were rarely so successful in the Medal tournaments where cumulative strokes are instead recorded.
Being a good investor is more akin to a Medal competition than a Matchplay event...but it often takes an early defeat or two to understand this.
The first time I went to a casino I won £690 and I thought it was brilliant (bad news). The next time we went I lost the lot which was a salutary lesson, and funnily enough I've gambled in casinos very rarely since! It also took me a hefty $50,000 loss on speculative mining shares to realise that there is no need to go down that path again.
Investing should be fundamentally simple for those of a patient temperament and an accumulator's mentality. Why speculate in low quality companies which have never made a profit or buy property in remote mining towns to chase a fast buck? 
Far better to aim to continue accumulating high quality assets such as shares in dividend-paying blue chip companies, index funds or well-located capital city properties, which will continue to deliver returns in perpetuity. 
 <img src="https://4.bp.blogspot.com/-xZ1-7M0G0Vg/U9KkuMdePYI/AAAAAAAAOwc/EOHQeczwPzY/s1600/2..jpg">
 
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<ul>
<li>Leverage</li>
</ul>
I'm not sure about you but I can't move my hands particularly fast. Yet when a supreme athlete such as Tiger Woods hits a golf ball, it really stays hit and the clubhead speed generated can top an awesome 120 miles per hour. How so? The reason is due to leverage.
Using the longest club in the bag, the 'one wood' or driver, there are golfers out there who can hit the golf ball extraordinary distances...up to half a kilometre in some cases! As Archimedes said: "give me a lever long enough lever and I shall move the world". 
Whooshka! Of course, in tournament play, one will rarely see a golfer hit a ball in such a manner, due to the necessary lack of control. All golfers use leverage to their advantage, but it must be utilised with a level of restraint and control, and a bit of common sense. 
Leverage is the principle reason that average investors look to investment property - residential real estate is the one asset class which allows them to use the greatest leverage. 
I recall as a nipper my parents selling their house which they'd bought for £4,000 in Sheffield for more than double the amount they had paid for it. They upgraded and later bought a house for £30,000 which they'd negotiated down by £1,500.
Even as a youngster I was struck by three things. Firstly, the sheer size of the numbers involved as compared to my old man's reasonably modest pay cheque.
Secondly, how even for a family where funds were pretty tight - a family of five boys supported on my Dad's probation officer salary - it was possible to build thousands of pounds of equity over time as a property owner.
And thirdly, how each time my parents moved house, prices had moved higher - much higher - and that wasn't only because they were trading up.
That's the combined power of leverage and compound growth at work, which allows sensible homeowners to build up significant equity or net worth over time.
In my case, I intuitively looked to investment property when I was in my 20s because it allowed me to invest with millions of dollars that I could not otherwise have done.
It should go without saying, however, that leverage is a double-edged sword and should only be used sensibly and with a long-term outlook, since while gains can be magnified, so too can losses.
The anti-real estate contingent tend to oscillate interchangeably between two lines of argument: that property has not been a good investment (demonstrably false, if you have invested sensibly) and that property investment is unethical or socially useless.
The fact of the matter is, if you know what you're doing, property can be an outstanding investment as part of a balanced portfolio.
<ul>
<li>Risk Management</li>
</ul>
If you were watching the British Open carefully, you'd have seen the brilliant Rory McIlroy decline to use his driver on the 72nd hole, instead opting to hit a more conservative long iron.
Why would a guy who had been melting it up to 400 yards off the tee across the hard links turf not use his biggest club? Risk management. 
McIlroy had already taken calculated risks earlier in the tournament and now was using less leverage and eliminating risk. It worked a treat and he took out the claret jug as the Open Championship winner.
Successful investing is very much like a 72 hole golf tournament in the the winners must use sound 'course management' to avoid making catastrophic mistakes and manage risk.
Moreover, it generally pays to be a bit more aggressive and invest in what are perceived as riskier growth or ownership when you are younger and have time on your side. 
Later in the game you may elect to deleverage or transition towards income assets, but the key is to get yourself into the happy position of having these choices.
You can visit <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) or Pete's <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blog</a>.
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>' .
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Five golfing analogies for investors

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While the real estate headlines are excitedly focusing on booming Sydney property prices let's instead take a look at what is happening to rents across Australia.
It is rare to see rents and dwelling prices firing at the same time or rising in concert strongly, and sure enough the June quarter inflation (CPI) data released this week revealed the trend in rental growth to be easing back across every Australian capital city.
The long run inflation data shows how on a national basis rents have never fallen in Australia.
Rents did fall slightly for several consecutive quarters in Perth (cumulatively by 8%) and Melbourne (3%) following the onset of the early 1990s recession.
And around the turn of the century rents fell by 8% over a period of more than a year in volatile Darwin, before then booming outrageously from 2005 to 2010 to levels that could not have been predicted by even the most wildly bullish of analysts.
The above instances aside, nationally rents have risen relentlessly for more than 40 years:
<img src="https://4.bp.blogspot.com/-8L4UHh_iLeo/U9ClZGroG4I/AAAAAAAAOuU/BjmW1SsfmXc/s1600/CPIRENT.jpg"> 
Zooming in the chart to cover the last five years in the major capital cities shows that rental growth is presently strongest in Sydney (+3.0% y/y) and Perth (+2.9%), but both cities have eased back after a strong half decade:
<img src="https://4.bp.blogspot.com/-l4t5KxDGsn4/U9ClLXumksI/AAAAAAAAOuE/nlWtZ51heSc/s1600/CPI+RENT+2.jpg">  
Rental growth is now quite weak in Melbourne (+1.7%) as an oversupply of certain property types begins to bite. 
The fundamentals of the Melbourne property market now appear relatively soft, but the market environment needs a trigger to expose them such as rising unemployment or higher interest rates.
According to the CPI data, Brisbane and Adelaide have recorded year-on-year rental growth of +2.2% and +2.9% respectively.
However, it is abundantly clear from the above chart that the trend is now down in all cases.
For the purposes of completeness, below is what has been happening of late in the other capital cities:
 <img src="https://1.bp.blogspot.com/-g9q-Xnqdz8A/U9ClLYQC5gI/AAAAAAAAOuI/ne0x87Ij72k/s1600/CPI+RENT+3.jpg">
Darwin continues to march to its own drum to some extent with some exceptionally strong rental growth over the past ten years due to its incredibly tight real estate market.
As at June 2014 Darwin's rents are still tracking at +4.8% year on year, although even in the Top End the trend is quite clearly now down.
Rental growth has been weak and has hit a prolonged plateau in Hobart (+1.2%), while Canberra is the most troubled of Australia's capital city housing markets.
With the labour market in mild disarray rents are sliding into negative territory in Canberra following on from negative house price growth over the past 12 months.
The Australian Capital Territory is the one location is been far better to be a tenant than a landlord over the last year.
Summary
In summary, rental growth is easing back or has eased back across all eight capital cities, but the compensating good news for property owners is that with fixed mortgage rates being slashed independently by the major banks, house prices are rising practically everywhere.
In Sydney's case, the market continues to boom, with house prices up by 17% in the last year and more than 25% since the market's most recent trough in 2012. 
Spring will soon enough be upon us agai,n so it will be interesting to see how much of that price momentum can be maintained into the traditionally more active time of year.
Renting v buying in Sydney on the next page. Please click below.
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Robust inner Sydney rental growth
One of the factors which can begin to put downward pressure on dwelling prices is when renting property becomes comparatively more attractive than buying it.
A few commentators dropped the ball last week when the Reserve Bank released a conveniently-timed research paper discussing just that point: whether folk may sometimes be better to rent property than buy it in the absence of accelerating dwelling price growth.
In doing so pundits perhaps missed the underlying point that the Reserve Banks is likely attempting to jawbone some speculative heat out of the market ahead of a now likely further interest rate cut.
Futures markets are seeing a rate cut to just 2.25% as increasingly likely, and, frankly, so am I.
Rents and prices rising 
The stark reality for Sydneysiders over the past half decade is that life has been easier for property owners because while dwelling prices in the inner suburbs have been rising strongly, so too have rents.
<a href="https://petewargent.blogspot.co.uk/2014/05/rba-on-housing" target="_blank">As the RBA itself noted recently</a>, the inner and middle ring suburbs are adding jobs and are seeing population growth rates well in excess of the state average...and New South Wales is also now adding the greatest number of heads per annum, notching up a massive +110,300 in 2013.
Over the past year, while pockets always exist where rents have overshot and are now falling back into line, rents in many inner suburb locations are continuing to rise well ahead of income growth and the inflation rate.
This is true both for inner Sydney units and apartments:
<img src="https://2.bp.blogspot.com/-P2FeSKAIH0k/U8zAFw1UnDI/AAAAAAAAOn8/mId44SZwO6s/s1600/SYDUNITS.jpg">
...and for inner Sydney houses:
<img src="https://1.bp.blogspot.com/-BLz0c9a4sqI/U8y_4FmjpoI/AAAAAAAAOn0/sCLEZMAzCHA/s1600/SYDHOUSES.jpg">
The rental growth, like price growth, has largely been focused on suburbs closer to the Central Business District.
The RBA's research showed that a near identical trend has played out across every capital city over the past decade.
Renting has not become comparatively more attractive than owning over the past five years or so as borrowing rates continue to decline, dwelling prices are rising and so too are median rents.
In the inner suburbs of Sydney in particular, there is continuing upwards pressure on the housing market.
And, for the reasons noted by the Reserve Bank in their detailed research, this is set to continue due to dramatic demographic shifts towards inner city living.
You can visit <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) or Pete's <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blog</a>.
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>' .
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Rental growth easing but house prices are rising practically everywhere

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In recent weeks, data from the Australian Bureau of Statistics (ABS) has revealed that the number of loans taken out for the purposes of construction has increased to the highest level in around four and a half years.
If we smooth the numbers out on a rolling annual basis, we can see that while an upturn is entrenched, the uptrend still remains relatively shallow at this stage, and there is much more lifting to be done here:
<img src="https://3.bp.blogspot.com/-tqj0YZO7Kec/U8oJqJk0eXI/AAAAAAAAOmc/BmOyCPYotp0/s1600/constr1.jpg">
With dwelling prices having risen over time the total value of construction loans on a rolling annual basis is getting set to break new record highs:
<img src="https://4.bp.blogspot.com/-QBdi5yNpAsg/U8oJqNmc-fI/AAAAAAAAOmY/NcXlcmhEXo4/s1600/consrt2.jpg">
Importance of this?
It's worth noting here why this is considered to be important.
Dwelling construction been extensively researched by the ABS in years gone by, and the data uncovered showed the construction industry to have a very strong multiplier effect on the economy.
One of the more depressing things about visiting Britain over the past six or seven years - apart from the ongoing under-performance of the national sporting teams, that is - has been the near total lack of cranes on the horizon. 
That's rarely a sign of a thriving economy.
Things have been picking up strongly for UK construction of late, but it's been a moribund period indeed for the construction industry.
<a href="https://www.abs.gov.au/Ausstats/abs@.nsf/94713ad445ff1425ca25682000192af2/ed6220072793785eca256b360003228f!OpenDocument" target="_blank">Here's the ABS</a> on the effect of construction on the multipliers on the wider economy in terms of output and employment in Australia:
"For every $1 million spent on construction output (houses, non-residential buildings, etc.) in 1996-97, a possible $2.9 million in output would be generated in the economy as a whole, giving rise to nine jobs in the construction industry (the initial employment effect), and 37 jobs in the economy as a whole from all effects.
"These flow-on effects are made up as follows. The initial effect of the additional construction is $1 million. The first round effect for this additional construction would be the increased value of activity of around $0.5 million in those businesses manufacturing the materials needed for the additional construction, such as concrete and steel frames.
"The businesses supplying and servicing the concrete and steel frame businesses, such as aggregate quarrying and raw steel production, experience an increased demand for their products and services. This industrial support effect is estimated to be an additional $0.4 million.
"As activity has increased in the construction industry, as well as in the suppliers to that industry and the suppliers to the suppliers, there is an increase in wages and salaries to employees in this chain. The spending of these wages and salaries induces a further round of consumption effects in other areas of the economy totaling an additional $1 million."
Multiplier of three for construction
So, there you have it: construction in Australia has a multiplier effect of close to three. That is, for every $1 million invested, an additional $3 million is generated in the economy as a whole. 
Now let's put this in its wider context.
Below is what has happened in Aussie construction over the long run. Note the gargantuan boom in engineering construction driven by the resources building boom.
This sector is set to tail off quite nastily over the coming few years, although it's not yet entirely clear how quickly that will happen. Note how construction has become overwhelming dominated by mining and resources:
<img src="https://2.bp.blogspot.com/-4H062eDXc9U/U8oKjO5YRII/AAAAAAAAOms/774bYa3YBso/s1600/cons3.jpg">
In terms of other building work done, the split between residential and non-residential building has tracked as follows:
<img src="https://1.bp.blogspot.com/-gtWrJsICYfs/U8oKvGB0FQI/AAAAAAAAOm0/-JrUJyQa-WU/s1600/CONS4.jpg">
We don't need to get bogged down too much in the headline numbers here, other than to note that if mining capital expenditure falls by 20% in the 2015 financial year (which <a href="https://www.abs.gov.au/ausstats/abs@.nsf/Latestproducts/5625.0Main%20Features3March%202014?opendocument&amp;tabname=Summary&amp;prodno=5625.0&amp;issue=March%202014&amp;num=&amp;view=" target="_blank">forecasts suggest</a> may well eventuate), and does something similar again in the following financial year too, this leaves a monster hole in the Australian economy to somehow be filled.
Only one shining light exists in the state economies at the moment for infrastructure and dwelling construction, that being New South Wales, which is busily tackling its infrastructure and dwelling deficit:
<img src="https://1.bp.blogspot.com/-GSjRk0aOP2A/U8oPWO50R4I/AAAAAAAAOnI/YQx8kQ8oq0o/s1600/NSW+cwd.jpg">
Article continues on the next page. Please click below. 
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States which need to rebalance?
The implication of the mining and resources construction boom detailed on the previous page is that the Aussie economy has gotten itself quite dramatically out of balance.
In the March 2014 quarter the total value of engineering construction seasonally adjusted at around $31,850 million was way, way bigger than the total value of building at closer to $21,750 million.
This means that some states are going to face very significant challenges when the mining construction drops away.
The quarterly engineering construction figures by state clarify which which states - Queensland and Western Australia in particular - are going to face an uphill struggle in the coming years.
Those two states have benefited greatly from the boom, so they face more of a challenge from the forthcoming downturn:
<img src="https://2.bp.blogspot.com/-o2yTIzIBqpE/U8ouGvfyJNI/AAAAAAAAOnc/-GshYS_mTcY/s1600/BWDa.jpg" style="line-height: 1.3em;">
This is especially so because when you look at the uplift in building work done in this cycle only New South Wales to date has shown any real sign of thriving. These figures are not seasonally adjusted so the next seasonal uplift will be key, but it's clear that Western Australia has hit a plateau, Victoria's house building boom was last decade's news and something is not working as it should be in Queensland in terms of building work. South Australia and the minnow states are floundering, and in any case they aren't going to add much value in chain volume measures terms:
<img src="https://2.bp.blogspot.com/-maZf5-kXmds/U8ouGnGYKhI/AAAAAAAAOnY/q4Z8QSzDQ-w/s1600/BWD1.jpg">
This something to be wary of when commentators start talking up the Brisbane property market with the usual hyperbole this year, stating that it is "due for a boom".
Look, maybe, yes, and the general consensus is that Brisbane offers relatively good bang for the buck and the outlook for the property markets over the the next few years appears bright. But equally it always pays to be careful of the shallow property market commentary which takes little (or more typically zero) account of what is actually happening in relation to these huge structural shifts in the Aussie economy. Yes, there is an argument for dwelling prices to rise strongly in response to low interest rates, but as a general rule people don't buy property when they don't have jobs, and there is a major rebalancing challenge lying right ahead in the Aussie economy, especially in the mining states. You'd need rocks in your head to call a sustainable property boom while taking no account whatsoever of what the wider economy and labour markets are up to. It's one to watch carefully. Rates to fall lower still 
The charts detailed above show quite clearly that the hole left by mining construction can't readily be filled only by building more houses and a moderate level of infrastructure.
Net exports need to increase, which they indeed have been doing, albeit in the face of lower commodity prices. Household consumption needs to increase, which it was doing quite nicely, but then appears to have stalled again post-budget.
With the economy looking likely to tread water in Q2 (the unpredictable effect of inventories left aside), futures markets are quickly getting around to realising that the next move in interest rates must be down. To me another rate cut is looking more and more likely by the week. Pencil in a likely interest rate cut before Xmas, for my money.
You can visit <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) or Pete's <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blog</a>.
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>' .
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