<p>Property developer One Living, backed by former Macquarie banker turned investment manager Chris Green’s investment firm, has unveiled plans to bring more institutional capital into housing to help address the national supply crisis.</p>

<p>The New York-based investor has focused his firm, GreenPoint Partners, on addressing the supply shortage hitting middle market housing in Australia.</p>

<p>It is backing the new One Living business to develop more than 1000 units along the eastern seaboard. The new firm is starting with a development on Mona Vale Road, on the border of Mona Vale and Pymble, in Sydney’s Northern Beaches, with around 140 apartments planned. They are eyeing off more sites across the city.</p>

<p>With cost pressures rising in the industry, One Living’s model is to be a vertically integrated developer-builder, so it can respond directly to the housing gap by removing the cost inefficiencies embedded in traditional residential delivery.</p>

<p>“We are building a platform designed to operate at scale and starting in a market where there’s a clear need for quality, attainable housing,” One Living joint managing director Joseph Scuderi said.</p>

<p>“It’s that missing middle – it’s that attainable end of housing… that’s what most Australians invest into and what Australians can actually afford.”</p>

<p><img alt="Mona Vale" data-entity-type="file" data-entity-uuid="798dfa93-4941-4db6-a696-31e9dc18e81c" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%202.31.50%E2%80%AFPM.png?VersionId=mKBqi5C_DmeiXS.AtJkcR8LQIxqCqmFi" /></p>

<p>GreenPoint Partners brings years of experience assembling and scaling real estate operating businesses across major markets. And Green sees a big opportunity in Australia.</p>

<p>“For its size, sophistication and importance to the community, Australia’s living sector has remained largely under-institutionalised, which represents significant opportunity,” Green said. “GreenPoint identified that gap, assembled the right team, and is backing One Living to build a platform that is aligned to market needs.”</p>

<p>Green said being a builder-developer would give the company the capacity and flexibility it required to deliver reasonably-priced homes.</p>

<p>“We want it to be at that attainable level; not super high end luxury but at that attainable level,” he said.</p>

<p><img alt="Mona Vale" data-entity-type="file" data-entity-uuid="74a5344a-4b26-4d4a-ada3-056b1220be77" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%202.32.15%E2%80%AFPM.png?VersionId=vY8hXHO4reBMdO8ZXMWCNtGZJofUPQ3j" /></p>

<p>&nbsp;</p>

<p>One Living will undertake a component of affordable housing in its schemes, which it will own and operate, and it could also run build-to-rent on some sites.</p>

<p>Green praised local policy settings.</p>

<p>“The NSW government is being very supportive, strategic and pragmatic in terms of how do we generate more supply of housing,” he said. “We think it’s actually positive for development and the bit that’s been lacking at that attainable level is that it’s lots of relatively small private developers, whereas we want to create an institutional platform.”</p>

<p>One Living is also&nbsp;looking at high-density projects and could take on more institutional funding in the future.</p>

<p>“The way we will be able to achieve economies of scale is through size,” Green added.</p>


Joel Robinson

One Living enters Sydney's new apartment market with Northern Beaches site acquisition

<p>It's been several years since there's been an opportunity to buy a brand new townhome in Melbourne's coastal suburb of Mordialloc. Even apartment developments in recent times have been few and far between in the area.</p>

<p>Local developer LDS Property identified the gap in new housing, securing a site on White Street, directly opposite&nbsp;Woodlands Golf Club Mordialloc. They've recently launched&nbsp;<a href="https://www.apartments.com.au/new-townhouses/wm-residences-mordialloc-102-white-street-mordialloc-vic-3195">WM Residences</a>, just 13 townhouses which they have already started building.</p>

<p>Projects by Buxton Director Heath Thompson, who is selling WM Residences, says the townhouses x that perfect middle ground be</p>

<p data-end="683" data-start="511">"Mordialloc residents have had limited options to downsize within the suburb, often forcing them to look elsewhere despite long-standing ties to the area," Thompson says.</p>

<p data-end="882" data-start="690">"With very little comparable new supply coming to market, projects like WM Residences are well placed, particularly as buyers look to capitalise on current conditions amid constrained supply."</p>

<p data-end="882" data-start="690">[smartcode_project:default project_id=134646 project_image_fid=6109]</p>

<p>The development, designed by regarded architecture firm&nbsp;<a href="https://www.apartments.com.au/architects/ewert-leaf">Ewert Leaf</a>,&nbsp;adopts a deliberately restrained architectural approach, focusing on simplicity, durability and liveability rather than overt design gestures.</p>

<p>The boutique scale is central to the offering. With only 13 three-bedroom residences, each home is configured to prioritise functional layouts and everyday use, supported by private terraces and secure two-car garages.</p>

<p>Ewert Leaf’s design response leans into a calm, neutral material palette. Interiors are defined by oak flooring, white walls and soft finishes, creating a consistent and understated backdrop. The approach avoids trend-driven detailing in favour of longevity, with an emphasis on natural light and spatial clarity.</p>

<p>[smartcode_project:default project_id=134646 project_image_fid=6110]</p>

<p>Beyond aesthetics, the homes are designed to meet contemporary performance expectations. Each residence targets a minimum 6-star energy rating, incorporating double glazing, comprehensive insulation and all-electric Bosch appliances.</p>

<p>The project’s location supports a walkable coastal lifestyle, sitting within close proximity to Mordialloc’s foreshore, Main Street retail strip and the train station. Local cafés and dining venues, including Suburbia Deli and Hendriks Café, are within a short walk, reinforcing the area’s established neighbourhood character.</p>

<p>[smartcode_project:default project_id=134646 project_image_fid=6116]</p>

<p data-end="247" data-is-last-node="" data-is-only-node="" data-start="0">While <a href="https://www.apartments.com.au/developments/mordialloc-vic-3195">Mordialloc</a> is often defined by its beach and pier, the project taps into other areas of day to day living, offering easy access to local food, casual dining and transport, rather than positioning itself purely as a lifestyle retreat.</p>

<p>WM Residences reflects a continued trend across Melbourne’s coastal suburbs towards smaller-scale, design-led townhouse developments, particularly on infill sites where proximity to amenity is already established.</p>

<p>With construction commenced prior to its market entry, the project aligns with a growing preference among buyers for developments with visible progress and defined delivery timeframes.</p>

<p>[smartcode_project_cta:default project_id=134646]</p>


WM Residences fills gap in Mordialloc townhouse market

<p>&nbsp;</p>

<p>Developer GURNER™ Group has revealed $1.65 billion in residential sales nationally across the 12 months to December 2025, driven largely by the continued momentum of its Docklands wellness-focused precinct, Elysium Fields.</p>

<p>The sales result was generated across seven projects in Victoria and New South Wales, headlined by Elysium Fields, GURNER™’s $2.75 billion mixed-use precinct planned for Harbour Esplanade in Docklands.</p>

<p>The project has recorded more than $500 million in sales across the first three towers, equating to around 580 apartments sold.</p>

<p>The first tower, Helios, has now sold out of its 240 private residences, with GURNER™ preparing to release a premium penthouse collection comprising 15 three-bedroom penthouses in coming weeks.</p>

<p>[smartcode_project:default project_id=144441 project_image_fid=370975]</p>

<p>Elysium Fields is being developed on the long-held 20,000 sqm Docklands site at 208-226 Harbour Esplanade, which had remained undeveloped for more than two decades prior to GURNER™ taking over the project around four years ago.</p>

<p>Construction has now commenced across four towers ranging between 18 and 30 storeys, with Hamilton Marino and Maxcon appointed as builders.</p>

<p>Once complete, the precinct is expected to comprise around 1,100 residences, alongside retail, hospitality and public realm uses integrated throughout the site.</p>

<p>[smartcode_project:default project_id=144441 project_image_fid=370981]</p>

<p>Designed by Fraser &amp; Partners in collaboration with GURNER™ Design House, the project has been positioned around the developer’s broader focus on wellness-led residential living.</p>

<p>“We don’t sell apartments. We create a true luxury lifestyle that simply doesn’t exist elsewhere in the market today,” Founder and Executive Chairman Tim Gurner said.</p>

<p>“To deliver that requires an extraordinary level of detail, coordination and discipline across multiple verticals, from design and hospitality through to wellness and service.”</p>

<p>“We’ve always believed that living extends far beyond the physical residence. It’s about how you feel the moment you arrive, how you live day-to-day, and the ecosystem that supports that.”<br />
[smartcode_project:default project_id=144441 project_image_fid=370977]</p>

<p>The project’s design places a heavy focus on landscaping, wellness amenities and biophilic design principles.</p>

<p>Plans include around 3,700 sqm of landscaped gardens and open space throughout the precinct, alongside a retail and dining offering spanning approximately 5,000 sqm.</p>

<p>The broader public realm strategy centres around what GURNER™ describes as the “Path of Life”, an urban forest and landscaped pedestrian environment intended to connect the various buildings and wellness spaces across the precinct.</p>

<p>The apartments themselves will incorporate a range of wellness-focused inclusions, including purified air and water systems, circadian lighting, antimicrobial surfaces, and optional in-home wellness upgrades.</p>

<p>[smartcode_project:default project_id=144441 project_image_fid=370980]</p>

<p>Gurner said the company’s experience through its Saint Haven wellness clubs had directly informed the residential offering now being incorporated into Elysium Fields.</p>

<p>“We’re seeing a clear global shift toward longevity, performance and proactive health,” Gurner said.</p>

<p>“Our role is to deliver that in a way that feels seamless, highly private and beautifully resolved within the environments we create.”</p>

<p>A large component of the wellness offering is planned through the resident amenity and health facilities proposed within the precinct.</p>

<p>That includes plans for bathing and recovery facilities spread throughout the towers, incorporating mineral pools, saunas, steam rooms, flotation therapy, red light therapy and wellness lounges.</p>

<p>The developer is also seeking approvals for what it describes as a “reverse ageing medical clinic” within the precinct.</p>

<p>[smartcode_project:default project_id=144441 project_image_fid=370978]</p>

<p>According to project information released by the group, the proposed facility would include cryotherapy, IV infusion therapy, infrared and dry saunas, PEMF beds, MRIs, DEXA scans, brain scans and blood analysis services.</p>

<p>Within the first tower, Helios, residents will also have access to a dedicated amenity offering known as the Sky Private Club.</p>

<p>The upper 15 levels of the building will include private lounges, dining spaces, rooftop amenities and optional private wellness studios integrated within residences.</p>

<p>The Helios tower itself comprises 260 apartments ranging between 60 sqm and 300 sqm, including a collection of penthouses.</p>

<p>That includes a planned two-storey penthouse spanning around 600 sqm with uninterrupted bay views.</p>

<p>The Elysium Fields precinct is being delivered in partnership with Digital Harbour Holdings, a consortium that includes the Liberman family, which controls the development rights across the Docklands site.</p>

<p>[smartcode_project:default project_id=144441 project_image_fid=370979]</p>

<p>The sales result comes as GURNER™ continues expanding its national development pipeline beyond Victoria.</p>

<p>“We have a strong pipeline across Australia and are now focused on scaling into key markets including New South Wales and Queensland, while continuing to build on our Melbourne base,” Gurner said.</p>

<p>“We currently have more than $3 billion in the market, growing to over $5 billion by October, and expect to materially outperform last year in the 2026 calendar year.”</p>

<p>The result also reflects the continued strength of the upper-end apartment market in Melbourne, particularly for owner-occupier-focused product with large-scale amenity and lifestyle offerings.</p>

<p>[smartcode_project_cta:default project_id=144441]</p>


Record result anchored by the Group’s “utopian” Elysium Fields precinct – defying market headwinds in Docklands.

Elysium Fields drive Gurner to $1.65 billion in apartment sales over 2025

<p>National Australia Bank (NAB) will fund <a href="https://www.apartments.com.au/new-apartments/palmera-residences-gold-coast-18-garfield-terrace-surfers-paradise-qld-4217">Palmera</a>, a $1 billion, 52-level luxury residential tower being developed by Central Equity in one of the Gold Coast’s most tightly held coastal locations at Northcliffe.</p>

<p>The project, launched recently by <a href="https://www.apartments.com.au/developers/central-equity">Central Equity</a>, one of Victoria’s largest private residential developers, comes at a time when construction funding for large residential developments has become increasingly competitive as lenders tighten exposure to the sector.</p>

<p>Multiplex has been appointed the builder, and construction is now underway.</p>

<p>[smartcode_project:default project_id=108274 project_image_fid=365784]</p>

<p>Since its first project, Central Equity has delivered more than 85 residential developments with a combined end value exceeding $8 billion.</p>

<p>Palmera reflects Central Equity’s growing focus on the Gold Coast luxury apartment market and continues a relationship between Central Equity and NAB that dates back to the late 1980s, when the bank funded one of Melbourne’s earliest inner-city residential towers at a time when high-rise apartment living in the CBD was largely unproven.</p>

<p>“NAB’s funding of Central Equity’s $36 million CBD development in the late 1980’s to the financing of the billion-dollar tower today highlights the long-term relationship between the two organisations in delivering major residential projects” said Central Equity Founder and Chairman Eddie Kutner.</p>

<p>He said NAB’s early support was instrumental in helping establish the company’s development model.</p>

<p>“When we commenced our first residential tower in the late 1980s the concept of funding off-the-plan apartments was still largely untested in Australia,” Kutner said.</p>

<p>“NAB recognised the opportunity early and supported the project when others were uncertain. That relationship has now continued for more than 37 years across many developments.”</p>

<p>[smartcode_project:default project_id=108274 project_image_fid=365771]</p>

<p>Central Equity was established in 1987 when Melbourne’s CBD and Southbank precinct were still dominated by warehouses and commercial buildings. Fewer than 100 residents lived in Southbank at the time, and large-scale residential development in the inner city was not widely considered.</p>

<p>Recognising changing demographics and lifestyle preferences, the company began developing high-rise residential projects designed to bring permanent residents into the city centre.</p>

<p>Central Equity has provided accommodation for approximately 40,000 residents across Melbourne’s CBD and Southbank, while also incorporating supporting infrastructure including essential lifestyle facilities like retail spaces, childcare facilities and neighbourhood activity centres.</p>

<p>Central Equity has spent many years assembling the Palmera development site on the corner of Garfield Terrace and Frederick Street in Northcliffe, creating a supersite of around 3,300 sqm.</p>

<p>The developer said the Palmera apartment tower reflects its long-term view of the Gold Coast as a growing and increasingly diversified economy.</p>

<p>[smartcode_project:default project_id=108274 project_image_fid=365768]</p>

<p>Supported by infrastructure including the light rail network, major road upgrades expanded education, hospital and medical facilities and continued expansion at the Gold Coast Airport with more international and domestic flights.</p>

<p>Positioned in the tightly held Northcliffe precinct, the 52-level tower will deliver 347 apartments, targeting buyers seeking a high-end coastal lifestyle, from downsizers to interstate investors.</p>

<p>Designed by Marchese Partners with interiors by DBI, Palmera has been conceived as a next-generation residential offering, featuring a collection of oversized apartments, with premium three-bedroom residences offering sweeping northern views stretching from Surfers Paradise through to Burleigh Heads.</p>

<p>[smartcode_project_cta:default project_id=108274]</p>


NAB funds $1 billion Surfers Paradise apartment development, Palmera

<p>Two years after completing one of the newest developments in North Sydney, developer <a href="https://www.apartments.com.au/developers/aqualand-australia">Aqualand</a> is turning its attention to the rapidly evolving St Leonards apartment market.</p>

<p>The developer, which completed AURA by Aqualand on North Sydney's Walker Street, has lodged plans for a 5,918 sqm site at <a href="https://www.apartments.com.au/new-apartments/33-37-herbert-street-st-leonards-nsw-2065">33-37 Herbert Street, St Leonards,</a> seeking approval for a pair of residential towers rising above a shared podium opposite Royal North Shore Hospital.</p>

<p>The proposal forms part of the broader transformation underway across the St Leonards-Crows Nest precinct, where former industrial and commercial sites are increasingly being redeveloped into high-density mixed-use projects tied to major transport infrastructure.</p>

<p data-end="792" data-start="529"><img alt="Aqualand" data-entity-type="file" data-entity-uuid="2cc428cf-fe70-4cac-9cd5-264ad53af62c" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%209.51.56%E2%80%AFAM.png?VersionId=otKSnHtbjAvAddOnovyXQMgcAwE6DMe1" /></p>

<p data-end="1040" data-start="794">According to the planning documents, the site sits “within the St Leonards–Crows Nest Strategic Centre, identified by the NSW Government as a key area for accommodating future jobs and housing across Sydney.”</p>

<p>The proposal has been designed by fjcstudio, formerly FJMT Studio, and is being progressed through the State Significant Development pathway due to its scale and affordable housing provision.</p>

<p>The scheme would comprise 413 apartments, including 46 affordable housing units, alongside retail and commercial uses fronting Herbert Street. The project would also include communal open space, landscaping, a swimming pool, gymnasium, children’s play areas and podium-level resident amenities.</p>

<p>Planning documents show the development would consist of a part-13, part-39 storey tower form positioned above a four-storey podium.</p>

<p>“The development comprises a unified podium that activates the street interface, and two setback towers to accommodate new housing supply while maintaining an appropriate human scale at ground level,” fjcstudio noted in its Design Report.</p>

<p>The northern and southern towers have been shaped to respond to the surrounding skyline while also limiting overshadowing impacts to nearby public open space, particularly Talus Reserve.</p>

<p>The design report said the differing tower heights were intended to “contribute to a varied skyline while responding to the surrounding built form context and solar access considerations.”</p>

<p><img alt="Aqualand" data-entity-type="file" data-entity-uuid="36da62dc-ff9e-41f2-a7e3-7be38373751c" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%209.51.45%E2%80%AFAM_0.png?VersionId=Mo6Rp2r.XRLTzIfg_PEEpw8NepDH8UBs" /></p>

<p>The site sits directly opposite Royal North Shore Hospital and within walking distance of both St Leonards Station and the new Crows Nest Metro station.</p>

<p>While the site itself sits just outside the formal Crows Nest Transport Oriented Development boundary, the planning documents repeatedly reference its alignment with the broader TOD objectives reshaping the Lower North Shore.</p>

<p>“The site is located adjacent to St Leonards Station and in close proximity to Crows Nest Metro which is within the Crows Nest Transit Orientated Development Accelerated Precinct which has been identified by the NSW Government to support housing delivery,” the Design Verification Statement noted.</p>

<p>According to fjcstudio, the project has been designed to respond to the broader transition occurring across St Leonards, where increasing residential density is being concentrated around transport infrastructure and employment hubs.</p>

<p>“The broader precinct is undergoing significant change, with a mix of existing mid-rise buildings and newer high-density developments,” the report stated.</p>

<p>“Recent and approved projects indicate a consistent shift toward taller built form, typically organised as tower-and-podium typologies with more active ground levels.”</p>

<p>The proposal includes close to 6,000 sqm of retail and commercial space across the ground floor and podium levels, designed to create a more activated street edge along Herbert Street.</p>

<p>Aqualand’s plans would also introduce a landscaped podium shared between the two towers, with communal open space in the form of a podium rooftop designed to support resident interaction and improve urban greening outcomes. The scheme would also introduce pocket parks at the northern and southern ends of the site, including a landscaped area at the corner of Herbert and Ella streets designed to improve pedestrian amenity and soften the streetscape.</p>

<p>&nbsp;</p>

<p>The proposal is being progressed through the NSW Government’s Housing Delivery Authority pathway, which was introduced to accelerate housing supply across the state. The application was declared State Significant Development in April 2025 following an expression of interest process.</p>

<p><img alt="Aqualand" data-entity-type="file" data-entity-uuid="faf6d97d-2671-454f-b85a-fe1c6a7be608" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%209.51.49%E2%80%AFAM.png?VersionId=diVd28OBVr5.YV.7prrOz.uAanwwwm7a" /></p>

<p>St Leonards has been particularly active with new developments in recent weeks. Developer SP Setia’s <a href="https://www.apartments.com.au/news/nsw/first-look-sp-setia-targets-st-leonards-skyline-with-40-storey-tod-tower">plans for a new 42-storey tower</a> recently went on exhibition through the same pathway, while <a href="https://www.apartments.com.au/news/nsw/first-look-stockland-plans-52-storey-538-apartment-st-leonards-tower">Stockland’s 52-storey tower proposal</a> was also recently unveiled.</p>

<p>Aside from the St Leonards project, which is expected to take around nine months to move through the approvals process ahead of a potential 2027 launch, Aqualand is also preparing to launch Boronia, a new apartment project in Roseville comprising around 111 apartments on Larkin Street.</p>

<p>The developer also has approvals in place for the next stage of the Barangaroo precinct, which will feature new residential, retail, hospitality and community uses, alongside a new metro entry across the five-hectare site.</p>

<p>More than 50 new retail destinations are planned for Central Barangaroo, alongside a 270-metre-long boulevard connecting Hickson Park to Nawi Cove. Together with Harbour Park, more than 50 per cent of the precinct will comprise public open space and parkland.</p>


First look: Aqualand joins St Leonards apartment party

Pete Wargent

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<p>EXPERT OBSERVER<a href="http://petewargent.blogspot.com/2019/02/vic-closes-in-on-full-employment" style="font-family: Helvetica, Arial, sans-serif; font-size: 13px;"> </a></p>
<div id="post-body-310214148269562303" class="post-body entry-content">
<div><strong><span style="text-decoration: underline;">Wages tick along</span></strong></div>
<div><span> </span></div>
<div><span>More wages weakness reported in the December 2018 quarter, though I doubt it'll be enough to move the needle for the Reserve Bank's view too much. </span></div>
<div><span> </span></div>
<div><span>Wages growth was +0.6 per cent for the private sector, and +0.6 per cent for the public sector, seasonally adjusted, decimal point quibbles aside. </span></div>
<div><span> </span></div>
<div><span>Annual growth in private sector wages of +2.29 per cent was still plenty slower than in the public sector at +2.53 per cent.</span></div>
<div><span> </span></div>
<div><span>However, this was the 'fastest' annual pace of growth in private sector - if you can justifiably use the word fast in this context - in the four years since December 2014.</span></div>
<div><span> </span></div>
<div><span>And it's also well ahead of headline inflation, which could feasibly sink to just 1½ per cent next quarter on lower fuel prices. </span></div>
<br><div class="separator"><a href="https://1.bp.blogspot.com/-nBZjMNpaef8/XG0O7o2sr4I/AAAAAAAAulA/VZ8K7fIX80EqIqcd4CJw4MWLe2mV9yFEwCLcBGAs/s1600/A1.jpg" target="_blank"><img src="https://1.bp.blogspot.com/-nBZjMNpaef8/XG0O7o2sr4I/AAAAAAAAulA/VZ8K7fIX80EqIqcd4CJw4MWLe2mV9yFEwCLcBGAs/s640/A1.jpg" width="640" height="352" data-original-height="791" data-original-width="1436"></a></div>
<br><div>As noted here previously (h/t Justin Smirk, Westpac) Victoria has been creating a thunderous volume of job openings and is nipping along nicely towards full employment, so wages will almost certainly pick up here. </div>
<br><div class="separator"><a href="https://4.bp.blogspot.com/-MkBSZfoxosY/XG0O8haXWeI/AAAAAAAAulI/oH4WaHmCGAAdtoZwbf9GSyZRrOTO1xxdQCLcBGAs/s1600/A4.jpg" target="_blank"><img src="https://4.bp.blogspot.com/-MkBSZfoxosY/XG0O8haXWeI/AAAAAAAAulI/oH4WaHmCGAAdtoZwbf9GSyZRrOTO1xxdQCLcBGAs/s640/A4.jpg" width="640" height="380" data-original-height="801" data-original-width="1348"></a></div>
<br><div>Indeed, at the state level for all sectors Victoria (+2.7 per cent) and New South Wales (+2.4 per cent) have accounted for most of the improvement since the nadir, while sprightly Tasmania (+2.6 per cent) is resurgent from a low base. </div>
<br><div class="separator"><a href="https://4.bp.blogspot.com/-kOwyXgYwYH8/XG0O7pPxALI/AAAAAAAAulE/FB4OU2W9HY8VVAIUx81m-k742UxlNDErQCLcBGAs/s1600/A2.jpg" target="_blank"><img src="https://4.bp.blogspot.com/-kOwyXgYwYH8/XG0O7pPxALI/AAAAAAAAulE/FB4OU2W9HY8VVAIUx81m-k742UxlNDErQCLcBGAs/s640/A2.jpg" width="640" height="374" data-original-height="815" data-original-width="1393"></a></div>
<br><div>Not much joy here in Western Australia, though we should acknowledge that WA has seen by some margin the greatest increase in wages over the past two decades, so a bit of post-boom payback was perhaps due. </div>
<br><div class="separator"><a href="https://1.bp.blogspot.com/-OhfQGmdLmDE/XG0O7stD8dI/AAAAAAAAuk8/GXmnh0QeLxgHwBqZiLw-Lg_0WGNeBgGPgCLcBGAs/s1600/A3.jpg" target="_blank"><img src="https://1.bp.blogspot.com/-OhfQGmdLmDE/XG0O7stD8dI/AAAAAAAAuk8/GXmnh0QeLxgHwBqZiLw-Lg_0WGNeBgGPgCLcBGAs/s640/A3.jpg" width="640" height="382" data-original-height="820" data-original-width="1371"></a></div>
<br><div>At the industry level the strongest wages growth was seen in healthcare and social assistance (+2.8 per cent), and electricity, gas, water, and waste (+2.8 per cent), while the weakest growth was in IT &amp; Telcos (+1.6 per cent). </div>
<div> </div>
<div><strong><span style="text-decoration: underline;"><span>The wrap</span></span></strong></div>
<div><span> </span></div>
<div>
<span>Still pretty sluggish overall, but skilled job vacancies came in at a near </span><span>7-</span><span>year high today, so there's still probably just enough evidence that the jobs market might pull through, provided credit flows a bit more freely in 2019. </span>
</div>
<div> </div>
<div>
<em>PETE WARGENT is the co-founder of AllenWargent property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank">blogger</a>.</em> </div>
</div>
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pwargent-M4siyDbqQY

More wage weakness but VIC close in on full employment

<html><body>
<p class="post-title entry-title">EXPERT OBSERVER </p>
<div>The Crestmont P/E is still levitating 119 per cent above its arithmetic mean, and remains close to the highest level in history at 33. </div>
<div> </div>
<div>During the tech bubble/bust the Crestmont P/E rose above 25 (denoting 'irrational exuberance') and momentarily touched the current record high of 33.7 before promptly crashing.</div>
<div> </div>
<div>In 1929 ahead of the Wall Street Crash and the Great Depression the Crestmont P/E peaked at 26.4.</div>
<div> </div>
<div>And before the subprime financial crisis it peaked at 24.7.</div>
<div> </div>
<div><em>Here's the chart update until today:</em></div>
<div><em> </em></div>
<div class="separator"><img src="https://1.bp.blogspot.com/-3OpG8WGx6R8/XwAw2raZRTI/AAAAAAAA2ss/6lECqCwqzYIqVsn2irGMCfU5I2iE47ZcwCNcBGAsYHQ/s640/CRESTMONT.jpg" width="640" height="464" data-original-height="661" data-original-width="910"></div>
<div><span style="text-decoration: underline;"><em>Source: Advisor Perspectives</em></span></div>
<div><span style="text-decoration: underline;"><em> </em></span></div>
<div>Earnings reports will be interesting to follow this year given that there's been a severe disruption to global economic activity in 2020. </div>
<div> </div>
<div>Back in Australia earnings expectations have been revised dramatically lower, for five sectors in particular:<br><br>
</div>
<div class="separator"><img src="https://1.bp.blogspot.com/-hA2yfrVmGiQ/XwAzRldfhYI/AAAAAAAA2tA/L69X-IeDMckAKMoKCDByQfFqgkdgotd4wCNcBGAsYHQ/s640/MS.jpg" width="572" height="640" data-original-height="1395" data-original-width="1248"></div>
<div>
<span style="text-decoration: underline;"><em><br></em></span><span style="text-decoration: underline;"><em>Source: Morgan Stanley</em></span>
</div>
<div> </div>
<div>Markets are forward-looking of course, but this puts PE valuations for the ASX 200 at extremely lofty levels. </div>
<div> </div>
<div class="separator"><img src="https://1.bp.blogspot.com/-7P8zzlWlhkU/XwAzb7cvj8I/AAAAAAAA2tE/jVLQ1ildzGk5tgTdxfgwdp5Qu4w8fG22gCNcBGAsYHQ/s640/MS2.jpg" width="640" height="400" data-original-height="883" data-original-width="1412"></div>
<div><span style="text-decoration: underline;"><em>Source: Morgan Stanley</em></span></div>
<p id="post-body-7807194319875705440" class="post-body entry-content">This would not be a good time to disappoint markets with an earnings miss, you'd think.</p>
<p class="post-body entry-content"><strong>Pete Wargent</strong><span> is the co-founder of AllenWargent property buyers and a best-selling author and blogger</span><strong> </strong></p>
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Where are markets heading with nosebleed valuations: Pete Wargent

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<h3 class="post-title entry-title">GUEST OBSERVER</h3>
<div class="post-header"> </div>
<div id="post-body-5220327253665162227" class="post-body entry-content">
<div>
<strong><span style="text-decoration: underline;">Headline immigration slows</span></strong><br><strong><span style="text-decoration: underline;"><br></span></strong>
</div>
<div>The January <a href="https://www.abs.gov.au/AUSSTATS/abs@.nsf/Lookup/3401.0Main+Features1Jan%202016?OpenDocument" target="_blank">Overseas Arrivals &amp; Departures</a> figures revealed that permanent immigration into Australia continued to slow into the beginning of 2016, with a net +268,400 permanent and long term arrivals now tracking more than a third below the peak.</div>
<div> </div>
<div>There were some 13,610 permanent departures in January, the highest on record, although ABS research shows that most "permanent" departures actually return to our shores within a year.</div>
<div> </div>
<div class="separator"><img src="https://3.bp.blogspot.com/-Nllm0CzUbOg/VtzVN9aLYzI/AAAAAAAAbsQ/j5EQ-HSsAYY/s640/ARR1.jpg" width="640" height="350"></div>
<br><div>The composition of immigrants continues to shift away from New Zealanders and Britons, and towards permanent settlers of Asian origin, now accounting for a record 57.7 per cent share over the past 12 months.</div>
<br><img src="https://4.bp.blogspot.com/-1w0a3JXsOt8/VtzVO6qsuFI/AAAAAAAAbsk/Ua4W6MM6LoA/s640/ARR6.jpg" width="640" height="350"><br><br><strong><span style="text-decoration: underline;">Record high 7.5 million arrivals</span></strong><br><br><div>Despite the soft headline figures those hoping for a significant decline in Australian population growth are likely to be disappointed, with the wider picture being that population growth will probably only slow from extremely strong to strong.<br><br>Indeed, after accounting for the rapid growth in student visas, total population growth in Australia is probably already rising again. </div>
<div> </div>
<div>In the year to January the number of short term arrivals blazed past 7.5 million for the first time in recording another strong +8.6 per cent rolling annual increase.</div>
<div> </div>
<div>The number of short term departures is still creeping up, but a much more sedate pace, implying an exchange rate driven rebalancing. </div>
<br><img src="https://2.bp.blogspot.com/-XRjxdNt05RE/VtzVN3S-ucI/AAAAAAAAbsY/SUn_byjPb0I/s640/ARR3.jpg" width="640" height="338"><br><div> </div>
<div>There was a huge increase in the number of holiday makers to Australia in the year to January of +442,000 taking the annualised total up to a fresh high of 3.57 million, while an additional +119,400 folk came to visit friends &amp; family, taking the total for this category up to a record 2.04 million. </div>
<br><img src="https://1.bp.blogspot.com/-bqgko3XUhEE/VtzVOrpQBMI/AAAAAAAAbsg/QSKZ6hUP6Gg/s640/ARR5.jpg" width="640" height="348"><br><div> </div>
<div>The key reason that population growth is unlikely to slow is the vast projected boom in international students. </div>
<div> </div>
<div>There were some 55,000 education arrivals in January, by a huge margin the biggest January on record, and it seems to be a nailed on certainty that 2016 will be the greatest ever year for the enrolment of international students. </div>
<div> </div>
<div>More relaxed visa rules mean that many thousands of these students will end up becoming permanent residents in time. </div>
<br><div class="separator"><img src="https://4.bp.blogspot.com/-MwGAtOVgnCU/VtzVN5KEkSI/AAAAAAAAbsU/BU61yN7ijtA/s640/ARR2.jpg" width="640" height="346"></div>
<div> </div>
<div class="separator">Last, but certainly not least, the explosion in visitors from China has virtually torn the roof off, with an astonishing +57.3 per cent increase from January 2015.</div>
<div> </div>
<div class="separator"><img src="https://3.bp.blogspot.com/-3RkQcEPt8YA/VtzVOttl-yI/AAAAAAAAbsc/JQFSsT-UH4w/s640/ARR4.jpg" width="640" height="348"></div>
<br><div>Naturally the most popular month in the calendar year for Chinese visitors will be February, due to the lunar year. The raw original data show that Chinese visitors in that month have ramped up at an astonishing pace:</div>
<div> </div>
<div><strong>Feb 2012 - 66,500</strong></div>
<div><strong>Feb 2013 - 110,400</strong></div>
<div><strong>Feb 2014 - 104,400 </strong></div>
<div><strong>Feb 2015 - 164,400</strong></div>
<div> </div>
<div>It seems likely that Febuary 2016 was another record-breaker, but we'll have to wait another month for the official confirmation of that. </div>
<div> </div>
<div><strong><span style="text-decoration: underline;">The wrap</span></strong></div>
<div> </div>
<div>The full suite of figures appear to tie with DIBP forecasts of population growth bottoming out at somewhere close to 300,000 per annum, before increasing strongly over the remainder of the decade.<br><br>It is important to note that most of the population slowdown has been in mining and resources regions - the largest capital cities have barely experienced any slowing at all to date.<br><br>Evidently the composition of immigration moving forward will be very different, with Asia being the key driver of population and tourism growth.<br><br>---<br><br>Chinese iron ore, coke and rebar futures have all hit limit up during today's trade, while crude might even get back to $40.<br><br>Nice to see. A few mining stocks are going ballistic. </div>
</div>
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Asian century tees off in Australia: Pete Wargent

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

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<div>The Reserve Bank of Australia (RBA) reported credit growth of +5.5 per cent over the year to August 2017, with business credit recording a solid +0.5 per cent expansion in the month.  </div>
<div> </div>
<div class="separator"><a href="https://4.bp.blogspot.com/-nVWC2xpUUBI/Wc-Xl9eohOI/AAAAAAAAmZI/PfV_gmWO20AnELd6olcBwuNaXtl8gCIRQCLcBGAs/s1600/RBA2.jpg"><img src="https://4.bp.blogspot.com/-nVWC2xpUUBI/Wc-Xl9eohOI/AAAAAAAAmZI/PfV_gmWO20AnELd6olcBwuNaXtl8gCIRQCLcBGAs/s640/RBA2.jpg" width="640" height="386" data-original-height="823" data-original-width="1359"></a></div>
<div> </div>
<div>Earlier in the week APRA had reported that a number of banks saw the total value of their loan books decline in August, most notably the Commonwealth Bank, following a tumultuous stretch.</div>
<div> </div>
<div>Indeed, all of the major banks now have investment loan books growing at a rate well below the 10 per cent speed limit imposed by the regulator, implying headroom to lend more to investors going forward. </div>
<div> </div>
<div class="separator"><a href="https://2.bp.blogspot.com/-6C_sKHC3Np4/Wc-XoerhVmI/AAAAAAAAmZQ/6H3bAi4p9VIvxkHacZH2VU5BkXdAgwVNgCLcBGAs/s1600/APRA.jpg"><img src="https://2.bp.blogspot.com/-6C_sKHC3Np4/Wc-XoerhVmI/AAAAAAAAmZQ/6H3bAi4p9VIvxkHacZH2VU5BkXdAgwVNgCLcBGAs/s640/APRA.jpg" width="640" height="384" data-original-height="823" data-original-width="1366"></a></div>
<div> </div>
<div>However, with a significant number of banks showing declines in their loan books during the month, this suggests that macroprudential measures are beginning to slow down lending from quite a few banks. </div>
<div> </div>
<div>In other words, perhaps the regulator is breathing down the necks of lenders just a bit more heavily than before. </div>
<p> </p>
<div class="separator"><a href="https://4.bp.blogspot.com/-w_qRzAxkK7M/Wc-XofafbkI/AAAAAAAAmZM/Of6OBe03NUcKWsHi0x5wXPzs21B4z7nOQCLcBGAs/s1600/APRA2.jpg"><img src="https://4.bp.blogspot.com/-w_qRzAxkK7M/Wc-XofafbkI/AAAAAAAAmZM/Of6OBe03NUcKWsHi0x5wXPzs21B4z7nOQCLcBGAs/s640/APRA2.jpg" width="640" height="376" data-original-height="830" data-original-width="1408"></a></div>
<p> </p>
<div class="separator"> </div>
<div>More loans being switched to principal and interest will help to see loan book balances ease too. </div>
<div> </div>
<div>In spite of this, the RBA reported housing credit growing by +6.6 per cent over the year, actually a notched faster than a year previously. </div>
<div> </div>
<div>Total housing credit is now approaching $1.7 trillion, with a substantial volume of loans being switched from investment to owner-occupier (no less than $58 billion since July 2015). </div>
<div class="separator"> </div>
<p> </p>
<div class="separator"><a href="https://1.bp.blogspot.com/-gmbZam-Sm44/Wc-XpZetJaI/AAAAAAAAmZU/dkZft07n3645l7xhJY2RyjJtCjRtTHT5QCLcBGAs/s1600/RBA3.jpg"><img src="https://1.bp.blogspot.com/-gmbZam-Sm44/Wc-XpZetJaI/AAAAAAAAmZU/dkZft07n3645l7xhJY2RyjJtCjRtTHT5QCLcBGAs/s640/RBA3.jpg" width="640" height="368" data-original-height="832" data-original-width="1444"></a></div>
<p> </p>
<div>The only reasonable conclusion appears to be that non-bank lenders are stepping in to pick up the slack, and total housing debt continues to power on. </div>
<div> </div>
<div>The only thing that will definitely stop the housing credit juggernaut, it seems, is rising interest rates, and these seem to be a way off yet. </div>
<p> </p>
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Housing credit shift to non-banks?

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<div>Since the introduction of new incentives, the number of dwellings <span style="text-decoration: underline;">financed</span> by first homebuyers bolted to the <a href="https://petewargent.blogspot.co.uk/2017/10/record-high-for-housing-finance" target="_blank">highest level in 92 months</a> in August 2017, so households are now being formed apace, especially in the two most populous states. </div>
<p> </p>
<div class="separator"><a href="https://2.bp.blogspot.com/-_VSHlNMkc4A/WeeUsZWsR8I/AAAAAAAAmrk/97SRzapVQb4Xbkaw1Z_a4o5h3Edyuz0MQCEwYBhgL/s1600/FHBs.jpg"><img src="https://2.bp.blogspot.com/-_VSHlNMkc4A/WeeUsZWsR8I/AAAAAAAAmrk/97SRzapVQb4Xbkaw1Z_a4o5h3Edyuz0MQCEwYBhgL/s640/FHBs.jpg" width="640" height="390" data-original-height="834" data-original-width="1365"></a></div>
<div> </div>
<div>There's much, much more to household formation than just this, though.</div>
<div> </div>
<div>Recall I showed from the 2016 Census figures that Australia's migration programme has led to a <a href="https://www.smh.com.au/business/the-economy/demographic-tsunami-will-keep-sydney-melbourne-property-prices-high-20170629-gx1onj" target="_blank">demographic tsunami</a>, being millions of 25 to 32 year-olds in Australia, about to swamp the housing markets, heavily focused on Sydney and Melbourne. </div>
<div> </div>
<div>Separate figures reporting the <a href="https://petewargent.blogspot.co.uk/2017/06/migrants-flock-to-capital-cities-stay" target="_blank">characteristics of recent migrants</a> showed that it's overwhelmingly now the capital cities that are about to be swamped, because new migrants flock to the capital cities, and end up staying there. </div>
<div> </div>
<div>Many first-timers are electing to rent where they live, and are instead buying investment properties as their first step onto the ladder, so the real number of first-time buyers is tracking at close to the long run average. Plus there's the trend towards co-ownership, as <a href="https://www.weeklytimesnow.com.au/real-estate/victoria/cobuying-a-solution-to-the-biggest-challenge-facing-buyers/news-story/e4fe88a599069d749765595101f2ba80" target="_blank">recently reported</a>. </div>
<div> </div>
<div><strong><span style="text-decoration: underline;">The 'bank of Mum &amp; Dad'</span></strong></div>
<div> </div>
<div>Perhaps as significantly, there are the parents buying homes for their kids, which is new household formation not reported in the first homebuyer finance numbers. </div>
<div> </div>
<div>We are now seeing this going on practically all the time at auctions in Sydney and Brisbane - to be blunt, it pushes up prices - and evidently it's a big thing down in Melbourne and Geelong too. </div>
<p> </p>
<div class="separator"><a href="https://3.bp.blogspot.com/--TU05mCnDD8/WeeUQaGjrcI/AAAAAAAAmrg/5lvbhp9aaCUdEMJKZRwPkCDh-O1Ou3F6wCLcBGAs/s1600/Cate1.jpg"><img src="https://3.bp.blogspot.com/--TU05mCnDD8/WeeUQaGjrcI/AAAAAAAAmrg/5lvbhp9aaCUdEMJKZRwPkCDh-O1Ou3F6wCLcBGAs/s400/Cate1.jpg" width="353" height="400" data-original-height="692" data-original-width="612"></a></div>
<p> </p>
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<div>
<br>Cate Bakos of <a href="https://www.catebakos.com.au/" target="_blank">Cate Bakos Property</a> in Melbourne notes that it's not only the first homebuyer sector that's being impacted by inherited money:<br><br><em>"Parents are impacting competition levels significantly. Firstly in the first homebuyer concession range - which is already screaming along with heightened borrowing capacity - and secondly the upgrader stakes. We are seeing and hearing of parents paying it forward with inheritance money."</em><br><br>Affordability has been a drag on household formation to some extent since the financial crisis.<br><br>However, this is projected to be more than offset by an ageing population - empty-nesters and downsizers - more divorces, more separations, widowhood, and a nascent yet growing trend towards <a href="https://www.abs.gov.au/ausstats/abs@.nsf/Latestproducts/3236.0Media%20Release12011%20to%202036?opendocument&amp;tabname=Summary&amp;prodno=3236.0&amp;issue=2011%20to%202036&amp;num=&amp;view=" target="_blank">lone-person households</a> living in apartments. And that's before we mention all the empty dwellings.<br><br>Over the longer term, the ABS forecasts that the number of households will increase by well over 50 per cent to 12.7 million over the 25 years to 2036.</div>
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First home buyer numbers bolt

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<p>National residential listings fell by -4.8% to 303,901 in January, as sellers enjoyed the sunshine and trotting off on their summer hols, according to SQM Research. </p>
<p>The monthly drop was driven by Melbourne (-13.9%) and Sydney (-6.9%). </p>
<p><img src="https://4.bp.blogspot.com/-X7AEY3BIk_M/WnlqPY5kKZI/AAAAAAAAoNM/Y9pH5Jfk3NsUDwG7pDjrLpZnLfxuKmnxQCLcBGAs/s640/sqm1.jpg" width="640" height="370" data-original-height="799" data-original-width="1376"></p>
<p>Despite the monthly decline, Sydney's listings at 26,150 are at the highest level since January 2009, being some +20.9% higher than a year earlier.<br><br> For the first time in nearly half a decade, Sydney buyers will actually have some choice!</p>
<p>At the other end of the spectrum Melbourne listings are -11.9% lower year-on-year, while Hobart listings have copped an absolute shellacking. </p>
<p><img src="https://2.bp.blogspot.com/-k0qjmmDauP0/WnmHj7Y11uI/AAAAAAAAoN8/YzsUfjuU2GUoiY2LrrmHG9VhQG7pBTIcACLcBGAs/s640/SQM1.jpg" width="640" height="384" data-original-height="817" data-original-width="1359"></p>
<p>Hobart's housing market is now a buyer's nightmare with just 2,362 listings across the metropolitan area being some -29.1% down from January 2017. </p>
<p>More strong price gains ahead for Hobart housing this year, then. </p>
<p>In most other capital city markets stock listings were relatively flat from a year ago.<br><br> Reported SQM: "Looking forward, with interest rates still at low levels and a possible expansion in lending by the banks, we expect a year of modest prices gains in Sydney and most other capital cities."</p>
<p>Interestingly SQM is quite positive for Sydney's prospects in 2018, certainly more so than most other commentators. </p>
<p>PETE WARGENT is the co-founder of AllenWargent property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank">blogger</a>.</p>
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Hobart housing market is a buyer's nightmare: Pete Wargent

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<p class="post-title entry-title">One of several reasons that some of Australia's property markets might fare surprisingly well in 2018 is the looming equities correction, driven by volatility in the US and elsewhere. </p>
<div id="post-body-3635881065614058753" class="post-body entry-content">
<p>It's now become clear (if it wasn't already obvious) that <a href="http://petewargent.blogspot.com.au/2018/01/rate-hikes-are-not-on-cards" target="_blank">interest rates aren't going to be hiked</a> this year, and probably not next either. </p>
<div>Employment is picking up nicely in some capital cities, and population growth is rising too, driving demand for housing. </div>
<div> </div>
<div>Meanwhile, the lack of enticing alternatives will keep a healthy volume of investors interested in real estate, with the cash rate stuck at record lows for the foreseeable future. </div>
<div> </div>
<div>Since closing at 6135.81 on January 9, the Aussie share market as measured by the ASX 200 index has already dropped by -5.13 per cent. </div>
<br><div class="separator"> </div>
<div class="separator"><a href="https://4.bp.blogspot.com/-4_sAlsZxuWc/WoGEnIt1p4I/AAAAAAAAoVU/Wh5XDB5n5WIcr8wZ2yalDLc1Cu-9oILIgCLcBGAs/s1600/ASX.jpg" target="_blank"><img src="https://4.bp.blogspot.com/-4_sAlsZxuWc/WoGEnIt1p4I/AAAAAAAAoVU/Wh5XDB5n5WIcr8wZ2yalDLc1Cu-9oILIgCLcBGAs/s640/ASX.jpg" width="640" height="382" data-original-height="820" data-original-width="1373"></a></div>
<div><span><strong> </strong></span></div>
<div>An inauspicious start to 2018 to say the least. </div>
<div><span><strong> </strong></span></div>
<div><span style="text-decoration: underline;"><span><strong>'Pain trade'</strong></span></span></div>
<div><span> </span></div>
<div><span>US stock futures are up quite strongly at the time of writing, so perhaps tomorrow will be a better trade Down Under. </span></div>
<div><span> </span></div>
<div><span>But somehow it seems doubtful that stock market nerves are going to be settled for a while yet. </span></div>
<div><span> </span></div>
<div><span>That's the uncanny tendency of markets to deliver the maximum amount of punishment to the most investors from time to time, especially after a long, strong run.</span></div>
<div><span> </span></div>
<div><span>Myer (ASX: MYR) finished today's trade with a fresh low close of 55 cents. </span></div>
<div><span> </span></div>
<div><span>Shorters should now be wary of the takeover risk. </span></div>
<div><span> </span></div>
<div><span><span>PETE WARGENT is the co-founder of </span><a href="https://allenwargent.com/" target="_blank"><span class="s2">AllenWargent</span></a><span> property buyers (London, Sydney) and a best-selling author and </span><a href="https://petewargent.blogspot.com/" target="_blank"><span class="s2">blogger</span></a><span>.</span></span></div>
<p><span> </span></p>
</div>
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Share correction could help Australia property markets

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<div>EXPERT OBSERVER</div>
<div> </div>
<div>OK, first things first. </div>
<div> </div>
<div>I am indeed a so-termed vested interest: I would like to see full employment, stronger wages and household income growth, the Aussie economy growing at least at trend or ideally above trend, and I don't want to see the housing market getting zinged unnecessarily. </div>
<div> </div>
<div>Yep, you got me on that one. </div>
<div> </div>
<div>With these formalities out of the way, I saw APRA's latest ADI exposures today described as 'red alert lending data', very 'concerning', a 'loosening' of lending standards, that should be 'ringing alarm bells' to APRA due to lenders 'breaking their own rules', among various other remarks (source: Digital Finance Analytics). </div>
<div> </div>
<div>For the record, while blog-flaming isn't really my bag, I must wholeheartedly disagree on each and every point!<br><br>Whatevs, I'll post a few deets and you can make your own mind up...</div>
<div> </div>
<div><strong><span style="text-decoration: underline;">Stock of IO loans plunges</span></strong></div>
<div> </div>
<div>Firstly, the flow of new interest-only (IO) loans in Q2 2018 was a meagre 16.6 per cent of residential term loans, absolutely miles below the initially proposed cap of 30 per cent (and a world apart from the 45.6 per cent record high of Q2 2015). </div>
<div> </div>
<div>With far fewer loans written overall from a year earlier in spite of a strong increase in the Aussie population, this represented a modest increase in percentage terms from the preceding quarter.</div>
<div> </div>
<div>However, the actual number of interest-only loans was some 52 per cent lower than in the corresponding quarter of the prior year - and almost 70 per cent lower than the number written at the peak of IO lending in 2015.</div>
<div> </div>
<div>A 'loosening'? Hardly.<br><br>But even if more IO loans were to be written henceforth I personally don't believe that would be <span>a bad thing.</span>
</div>
<div><span> </span></div>
<div><span>The last thing<span> we need <span>is $½ trilli</span>on of IO</span> mortgages being reset with undue haste - unless you actually want to see the housing market get stiffed, which of course many people do - and some breathing space would surely be welcomed by a portion of existing IO borrowers. </span></div>
<p> </p>
<div class="separator"><img src="https://4.bp.blogspot.com/-tFVWEE8Ibxg/W5kafR9EsAI/AAAAAAAAr3M/i525R8a2Vz0RTipYynJRdMnqcv0vtlPHwCLcBGAs/s640/IO1.jpg" width="640" height="372" data-original-height="803" data-original-width="1377"></div>
<p> </p>
<div>Regardless of your views on that, there was another enormous decline in the stock of IO loans in the June quarter, with IO loan balances outstanding now having plunged some $119 billion lower over the past five quarters. </div>
<div> </div>
<div>The share of IO loans outstanding through June 2018 was thus by some margin at the lowest level across the entire data series at about 29 per cent, down from close to 40 per cent in late 2015. </div>
<div> </div>
<div>Note that these numbers only run to the end of the 2018 financial year; at the current trajectory the share of IO loans will likely be around 26.9 per cent by the end of this month, a figure that was truly unthinkable only last year, and the lowest level in decades. </div>
<div> </div>
<div class="separator"><img src="https://2.bp.blogspot.com/-VvYLsKyPgs4/W5kafal-H0I/AAAAAAAAr3c/Z0gyForrg7IQlC8ki_SD-5ePZVQnPQW_wCEwYBhgL/s640/Io3.jpg" width="640" height="374" data-original-height="801" data-original-width="1367"></div>
<p><br><span>A loosening...very droll.</span><br><br></p>
<div>
<strong><span style="text-decoration: underline;">Less and less and less high-LVR lending</span></strong><br><br>Secondly, in relation to DFA's 'red alert' on lending standards, the loan-to-value (LVR) ratios on new loans have been tightening incrementally for the better part of half a decade now.</div>
<div> </div>
<div>Loan volumes are down, there was a miniscule change in Q2 for the share of new loans written at 80 per cent LVR or above, while loans written above 90 per cent LVR or above have never been as low as they are today since the available records began.</div>
<div> </div>
<div>'Red alert'? You must be having a giraffe, surely - we've literally never seen lending standards remotely like it!</div>
<p> </p>
<div class="separator"><img src="https://1.bp.blogspot.com/-myr13CMquKE/W5kafSp7IYI/AAAAAAAAr3I/yRholEdAVYs5ZbZ6AiRGWIEbZtAQeLy0QCLcBGAs/s640/IO2.jpg" width="640" height="368" data-original-height="796" data-original-width="1381"></div>
<div> </div>
<div>Thirdly, low-doc and other non-standard loans are also tracking at the lowest level on record. </div>
<div> </div>
<div>Fourthly, the quarterly flow of new investment loans plunged by the best part of $5 billion year-on-year, so how you conclude a sudden loosening of standards from that I can't fathom (automatic red card for anyone directly comparing volumes from Q1 to Q2). </div>
<div> </div>
<div>And fifthly, a word that is devilishly hard to spell at the best of times, DFA cites loans approved outside serviceability, noting that these should be ringing 'alarm bells' to the regulator.</div>
<div> </div>
<div>Fair suck of the sauce bottle, mate, but this almost certainly represents a timing issue and reflects <em><strong>tighter</strong> </em>lending standards, not looser.</div>
<div> </div>
<div>You can't tell me with a straight face that banks are blithely waving through marginal or borderline applications and then willingly reporting them as such in the current lending environment. Not happenin'.</div>
<div> </div>
<div>'I could go on...', as Jon Culshaw's impersonation of Russell Crowe might drily observe.</div>
<div> </div>
<div>Due apologies for the apparent curtness, but this stuff has a tendency to be uncritically reported by rote, so someone needs to chime in with a few of these inconvenient actualities.<br><br>Much obliged. As you were :-)</div>
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Interest-only loans running at 70 per cent down on 2015 peak: Pete Wargent

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<div><span>EXPERT OBSERVATION</span></div>
<div><span> </span></div>
<div><span>The Foreign Investment Review Board (FIRB) released its Annual Report for the 2017 financial year, and as expected it showed that investment in new apartments from mainland Chinese investors has been annihilated by a combination of fee charges and tighter capital controls.</span></div>
<div><span> </span></div>
<div>
<span>There's much more to the Annual Report than just the residential real estate investment aspect, of course, but this is a blog not an Encyclopaedia Britannica so let's crack straight into it.</span><span><br></span>
</div>
<div><span> </span></div>
<div><span>Although the impact on total foreign investment was played down in the report, the reality is that the number of residential approvals have been smoked, down by 67 per cent from the prior year. </span></div>
<p> </p>
<div class="separator"><a href="https://2.bp.blogspot.com/-UMTpeaTHMM4/WwyhL22FvEI/AAAAAAAAqP0/8gaf_QtZb183rLkVwdH45jQUDJNGnkdRQCLcBGAs/s1600/FIRB1.jpg"><img src="https://2.bp.blogspot.com/-UMTpeaTHMM4/WwyhL22FvEI/AAAAAAAAqP0/8gaf_QtZb183rLkVwdH45jQUDJNGnkdRQCLcBGAs/s640/FIRB1.jpg" width="640" height="372" data-original-height="780" data-original-width="1337"></a></div>
<div>Similarly the value of residential approvals crashed 65 per cent lower from $72.4 billion to $25.2 billion. </div>
<p> </p>
<div class="separator"><a href="https://2.bp.blogspot.com/-eeKkUWK9UlM/WwyhMNmDdLI/AAAAAAAAqP4/8tL55X2DYeMHxJaDttmNpm2Z3WPJ1uxcQCLcBGAs/s1600/FIRB2.jpg"><img src="https://2.bp.blogspot.com/-eeKkUWK9UlM/WwyhMNmDdLI/AAAAAAAAqP4/8tL55X2DYeMHxJaDttmNpm2Z3WPJ1uxcQCLcBGAs/s640/FIRB2.jpg" width="640" height="372" data-original-height="801" data-original-width="1376"></a></div>
<p> </p>
<div>The bulk of new approvals through this unprecedented cycle have been for new dwelling exemption certificates, mainly for Chinese investors.</div>
<div> </div>
<div>Looking at these numbers it's not hard to understand how Sydney now has more apartments approved but not yet commenced than at any time in its history, as <a href="http://petewargent.blogspot.com.au/2018/04/bust-looms-for-sydneys-apartment" target="_blank">detailed here previously</a>.</div>
<div> </div>
<div>The offshore buyers have dried up, demand from domestic investors has been stymied, and the demand from owner-occupiers is insufficient to get new development project finance across the line. </div>
<p> </p>
<div class="separator"><a href="https://2.bp.blogspot.com/-NB_Pr0ox8ag/WwyhMFmGT_I/AAAAAAAAqP8/QW3ddVDDvDsLNYRsM8ydj3RaFs_WdVtqQCLcBGAs/s1600/FIRB3.jpg"><img src="https://2.bp.blogspot.com/-NB_Pr0ox8ag/WwyhMFmGT_I/AAAAAAAAqP8/QW3ddVDDvDsLNYRsM8ydj3RaFs_WdVtqQCLcBGAs/s640/FIRB3.jpg" width="640" height="376" data-original-height="798" data-original-width="1354"></a></div>
<p> </p>
<div>Statistically it appears to be a certainty that Sydney will experience the greatest number of failed apartment projects as these trends flow through. </div>
<p> </p>
<div class="separator"><a href="https://4.bp.blogspot.com/-oB--8HHlBVI/WwyhNNBYK4I/AAAAAAAAqQA/jcgvA_iBayUyUp_smd7mvblQxlk_NFajQCLcBGAs/s1600/FIRB4.jpg"><img src="https://4.bp.blogspot.com/-oB--8HHlBVI/WwyhNNBYK4I/AAAAAAAAqQA/jcgvA_iBayUyUp_smd7mvblQxlk_NFajQCLcBGAs/s640/FIRB4.jpg" width="640" height="378" data-original-height="801" data-original-width="1355"></a></div>
<p> </p>
<div>I expect to see plenty of apartment projects stalling, and increasing signs of discounting on new Sydney apartments.<br><br>Perhaps this was an inevitable end-game for this cycle, where development has been too much skewed towards apartments for investors, and too little towards the types of medium-density dwellings that people want to reside in.</div>
<div> </div>
<div><strong><span style="text-decoration: underline;">The wrap</span></strong></div>
<div> </div>
<div>As noted, there is much more to foreign investment than just new apartment purchases, with total investment of $168 billion only 4 per cent below the level seen in the prior year. </div>
<div> </div>
<div>And indeed, investment in manufacturing, agriculture, ports, other commercial real estate, and resources has catapulted China to become by far and away the greatest investor in Australia at $38.9 billion in FY2017, miles ahead of the United States in second place at $26.5 billion.</div>
<div> </div>
<div>Nevertheless, these figures will have some significant impacts on the new apartment sector, construction trends, and the broader economy - and especially so in Sydney.</div>
<div> </div>
<div>
<span>PETE WARGENT is the co-founder of AllenWargent property buyers (London, Sydney) and a best-selling author and </span><a href="https://petewargent.blogspot.com/" target="_blank">blogger</a><span>.</span>
</div>
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