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


Joel Robinson

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

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


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

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


Maréa Residences brings parkside apartments to Coolangatta

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


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

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


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

Pete Wargent

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

pwargent-M4siyDbqQY

Listings lowest on record says McGrath: Pete Wargent

<html><body>
<p><strong>Expert Observer</strong></p>
<p>It was announced in the 2017 Budget speech that the regulator APRA will explicitly be allowed to differentiate loan controls by location.</p>
<p>This is another move signalling that politicians and regulators don't trust banks to lend responsibly, while simultaneously inferring that they know better than the market what 'should' be happening in terms of property markets and lending activity (which may be a positive thing or a very worrying development depending on your outlook!).</p>
<p>Practically speaking this means that APRA might look to restrict the flow of credit into 'hot' housing markets - basically, Sydney - while presumably steering clear of intervention in markets where prices and rents are in a multi-year freefall (such as Darwin, Gladstone, or indeed any number of of Australia's resources regions).</p>
<p>This all sounds jolly good on paper, until you think about all of the potential ramifications of regulatory intervention. There isn't the space here to go into detail on this point, but it's a concern!</p>
<p><strong>Lending finance rebounds</strong></p>
<p>The March 2017 Lending Finance figures, which strangely never seem to get any media coverage, saw total lending jump tidily from $67.6 billion to $72.9 billion in seasonally adjusted terms.</p>
<p><a href="https://1.bp.blogspot.com/-2f6hTXVdfZA/WR4AGIWCN3I/AAAAAAAAj6o/BW7FQ9Afn98N7wzbfoN5JlhkrJZtkOgQgCLcB/s640/A1.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="https://www.urban.com.au/images/2017/05/19/rsz_lendingfinace.png" alt=""></p>
<p>Lending to homebuyers was relatively steady in the lead-up to APRA's latest round of macroprudential curbs, while nationally there was a moderate increase in lending to property investors (classified below under commercial lending).</p>
<p>It's generally reported that lending for real estate is unproductive and risky, while lending to business is productive and a good thing. This may be true to an extent, though there are many sub-trends to take into account.</p>
<p>Overall commercial lending saw a neat increase in the month of March to be solidly higher year-on-year, even if the recent trend series is flat.</p>
<p>Renovations rose to a 6.5 year high in March 2017, as Aussies apparently shunned stamp duties and trading up for staying put and renovating instead, though looking at the numbers in their historical context the 'renovation boom' story seems a bit less enticing.</p>
<p>Splitting out commercial finance fixed loans by industry shows how lending into the mining sector has all but evaporated, declining by a further 46 per cent over the year to March. Commercial lending to the mining industry has fallen to about a quarter of the level seen at the peak as the resources construction cliff now approaches its nadir.</p>
<p>Despite this massive contraction, annual lending for construction continues to expand at a sprightly double digit pace, a trend which belies Australia's over-reliance on the residential building sector.</p>
<p><strong>Investor loans diverge</strong></p>
<p>Carving up loans to property investors by state, it's clear that Sydney investors don't believe in the apartment oversupply and have been doubling down on harbour city real estate with a vengeance.</p>
<p>Lending for investment in New South Wales surged to $6.2 billion in March - 39 per cent higher than for the same month last year - signalling a huge rebound since APRA's first round of macroprudential restrictions.</p>
<p>There was also something of an increase in investor lending in Victoria which will warrant careful observation.</p>
<p><a href="https://4.bp.blogspot.com/-FvHnxzfoySg/WR4AGTk0z8I/AAAAAAAAj6s/fAgDQzINy_seIhISKqHG962BVPuXvel_ACLcB/s640/A3.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="https://www.urban.com.au/images/2017/05/19/rsz_investorloansbystate.png" alt=""></p>
<p>The massive divergence in fortunes across the states in the prevailing low interest rate environment is ultimately what led to APRA's new powers to target lending in specific neighbourhoods.</p>
<p>While Sydney property has been burning up, property investor loan volumes in the Northern Territory have collapsed to their lowest level in 11 years as prices and rents in Darwin continue to fall.</p>
<p><strong>The wrap</strong></p>
<p>Overall, it was a stronger month for lending finance in aggregate, with a sizeable lift in commercial finance.</p>
<p>The housing market figures pre-date APRA's announcement at the end of the month of March that new restraints would be applied to interest-only lending.</p>
<p>What the figures do show is the massive divergence in investor sentiment between the resources states and Sydney, and, to a lesser extent, Melbourne.</p>
<p>If this continues APRA may be called upon to use its new powers sooner rather than later.</p>
<p><em>PETE WARGENT is the co-founder of <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blogger</a>.</em></p>
<p><em>His latest book is <a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank" rel="nofollow">Four Green Houses and a Red Hotel</a>.</em></p>
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APRA may deploy its 'special powers': Pete Wargent

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<p>I've written a lot here about Queensland's record apartment construction boom, which is now rebalancing. See <a href="http://petewargent.blogspot.com.au/2017/10/spirit-in-sky" target="_blank">here</a> and <a href="http://petewargent.blogspot.com.au/2018/02/filling-up" target="_blank">here</a>, for example. </p>
<p>The number of attached dwellings constructed through this cycle will exceed even the post-recession boom of the early 1990s. </p>
<p>The number of detached house starts is now rising steadily, but for attached dwellings new commencements are falling fast, especially for the higher-density projects.</p>
<p>And the official numbers are six to nine months old.  </p>
<p>A quick drive around central Brisbane reveals that many projects have been stalled or mothballed, and staged releases pushed out. </p>
<p>Developers simply can't shift many of them, with unusually 'flexible' terms being offered to prospective buyers in some cases. </p>
<p><a href="https://2.bp.blogspot.com/-Rg09ZgLw5Ww/WrdC6jxd5GI/AAAAAAAApGI/QOTtowImShEDYsVAlG0pkYKzK4srDyOcQCLcBGAs/s1600/QLD.jpg" target="_blank"><img src="https://2.bp.blogspot.com/-Rg09ZgLw5Ww/WrdC6jxd5GI/AAAAAAAApGI/QOTtowImShEDYsVAlG0pkYKzK4srDyOcQCLcBGAs/s640/QLD.jpg" width="640" height="390" data-original-height="830" data-original-width="1356"></a></p>
<p>Below annual dwelling starts for the state are mapped against the estimated change in the resident population. </p>
<p>I deliberately haven't messed around with the axes on the chart as some are inclined to do.</p>
<p>After all, this cycle has been characterised by record volumes of high-rise apartments, which might house fewer persons per unit on average previously (while there is arguably the issue of Chinese investors and vacant apartments to account for). </p>
<p>The numbers show total dwelling starts falling fast in 2017, as they needed to. </p>
<p>Queensland's net overseas immigration and therefore population growth pulled back hard after the peak of resources construction, leading to a dwelling stock overhang, in a similar vein to Western Australia. </p>
<p><a href="https://4.bp.blogspot.com/-MyszNFjMdGg/WrdCT_USiBI/AAAAAAAApF4/4K2K3u130jAvs7df950CNpjJjU_GvsVgACLcBGAs/s1600/A2.jpg" target="_blank"><img src="https://4.bp.blogspot.com/-MyszNFjMdGg/WrdCT_USiBI/AAAAAAAApF4/4K2K3u130jAvs7df950CNpjJjU_GvsVgACLcBGAs/s640/A2.jpg" width="640" height="392" data-original-height="828" data-original-width="1347"></a></p>
<p>Fortunately for local developers, Queensland has become the state with the <a href="http://petewargent.blogspot.com.au/2018/03/where-why-population-growth-is" target="_blank">greatest internal population flows in the country</a>, which is helping to stabilise the ship.</p>
<p>They'll be looking to offload their final apartments quick-sharp and put the shutters up for the remainder of this cycle. </p>
<p>As ever, lots of variations are apparent when drilling down to the regional and suburb level. </p>
<p><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></p>
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Queensland's internal population flows stabilising the CBD apartment ship: Pete Wargent

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<p class="post-title entry-title">EXPERT OBSERVER</p>
<p class="post-title entry-title"><a href="http://petewargent.blogspot.com.au/2018/04/housing-finance-at-6-month-high"></a><strong style="color: #333333; font-family: Tahoma, Helvetica, Arial, sans-serif; font-size: 12.16px;"><span style="text-decoration: underline;">Housing finance to slow</span></strong></p>
<div id="post-body-3782979424120573100" class="post-body entry-content">
<div>The Housing Finance figures were released for February 2018 this week, reported as "Housing finance falls in February" (Australian), "Falls felt for February" (Rate City), and so on.</div>
<div> </div>
<div>Interesting interpretations, given that housing finance was...well, up!</div>
<div> </div>
<div>Anyway, having allowed a few days to elapse, here are four thoughts.</div>
<div> </div>
<div><strong><span style="text-decoration: underline;">1 - Loan sizes up</span></strong></div>
<div> </div>
<div>One less well reported thing that I picked up was the rise in the average loan size over the past year to non-first homebuyers. </div>
<br><div class="separator"><a href="https://3.bp.blogspot.com/-sFMQ5qZidWg/WtGJFCzTDCI/AAAAAAAApZs/aQj0azYhYZIaNO6P5i4e-tqwiXO6IcE0gCLcBGAs/s1600/A.jpg" target="_blank"><img src="https://3.bp.blogspot.com/-sFMQ5qZidWg/WtGJFCzTDCI/AAAAAAAApZs/aQj0azYhYZIaNO6P5i4e-tqwiXO6IcE0gCLcBGAs/s640/A.jpg" width="640" height="370" data-original-height="799" data-original-width="1380"></a></div>
<br><div>Across the states, Victoria has been the main driver of rising average loan sizes, although each of the most populous states has seen an increase over the year. </div>
<br><div class="separator"><a href="https://1.bp.blogspot.com/-CTDOLXluGZk/WtGdsxOO_wI/AAAAAAAApa0/gZ5P9igaXOweuEskDqxF_Lbb_8RxHBnmwCLcBGAs/s1600/B1.jpg" target="_blank"><img src="https://1.bp.blogspot.com/-CTDOLXluGZk/WtGdsxOO_wI/AAAAAAAApa0/gZ5P9igaXOweuEskDqxF_Lbb_8RxHBnmwCLcBGAs/s640/B1.jpg" width="640" height="376" data-original-height="813" data-original-width="1377"></a></div>
<br><div>As a result, owner-occupier commitments rose +1.3 per cent in February, and investor loans were up +0.5 per cent, taking total housing finance to a 6-month high of $33.52 billion.</div>
<div> </div>
<div>Drilling the trendlines through the data shows that total housing finance has essentially been flat for 15 months now, while a fair chunk of refinancing has been in evidence within that total.</div>
<br><div class="separator"><a href="https://1.bp.blogspot.com/-1Bjss393W5U/WtGJFgDnoVI/AAAAAAAApZw/njaKD7l4b0YeEKNbUqyQmx4zk0-Po1RswCLcBGAs/s1600/A1.jpg" target="_blank"><img src="https://1.bp.blogspot.com/-1Bjss393W5U/WtGJFgDnoVI/AAAAAAAApZw/njaKD7l4b0YeEKNbUqyQmx4zk0-Po1RswCLcBGAs/s640/A1.jpg" width="640" height="376" data-original-height="812" data-original-width="1377"></a></div>
<br><div><strong><span style="text-decoration: underline;">2 - First homebuyer incentives bite</span></strong></div>
<div> </div>
<div>Another notable trend was that first homebuyer loans were up by a third from a year earlier, driven by New South Wales, where the number of first homebuyers doubled from February 2017.</div>
<br><div class="separator"><a href="https://4.bp.blogspot.com/-5ibkv7O3WjA/WtGJGTuCnxI/AAAAAAAApZ4/1T7jjV8_T0w5zCq41Wx86Xe0xZPWDGBowCLcBGAs/s1600/A3.jpg" target="_blank"><img src="https://4.bp.blogspot.com/-5ibkv7O3WjA/WtGJGTuCnxI/AAAAAAAApZ4/1T7jjV8_T0w5zCq41Wx86Xe0xZPWDGBowCLcBGAs/s640/A3.jpg" width="640" height="382" data-original-height="815" data-original-width="1359"></a></div>
<br><div class="separator"> </div>
<div>Homebuyer commitments for new dwellings rose by +6.6 per cent from a month earlier, but are now in a trend decline from 4-decade highs. </div>
<div> </div>
<div class="separator"><a href="https://1.bp.blogspot.com/-1ntJnZ5ey7U/WtGJHSE47qI/AAAAAAAApaA/uQkffE2SL4sQjzMQMv9_3JghWoZw38fNACLcBGAs/s1600/A6.jpg" target="_blank"><img src="https://1.bp.blogspot.com/-1ntJnZ5ey7U/WtGJHSE47qI/AAAAAAAApaA/uQkffE2SL4sQjzMQMv9_3JghWoZw38fNACLcBGAs/s640/A6.jpg" width="640" height="376" data-original-height="797" data-original-width="1350"></a></div>
<br><div><strong><span style="text-decoration: underline;">3 - Prevalence of non-banks</span></strong></div>
<div> </div>
<div>Thirdly, the trend result for non-bank lending declined in the month, and remains at only around half the peak levels of a decade ago, but will nevertheless remain a key point of interest as lending standards come into focus. </div>
<br><div class="separator"><a href="https://1.bp.blogspot.com/-HIFtpR1pkCw/WtGJHYBPHsI/AAAAAAAApZ8/spmSAsGYg9ME6AkJBC5Jjs_eRtOZTkWHgCEwYBhgL/s1600/A4.jpg" target="_blank"><img src="https://1.bp.blogspot.com/-HIFtpR1pkCw/WtGJHYBPHsI/AAAAAAAApZ8/spmSAsGYg9ME6AkJBC5Jjs_eRtOZTkWHgCEwYBhgL/s640/A4.jpg" width="640" height="388" data-original-height="815" data-original-width="1340"></a></div>
<br><div><strong><span style="text-decoration: underline;">4 - Royal Commission to slow lending</span></strong></div>
<div> </div>
<div>Overall housing finance beat expectations despite a small decline in the actual number of home loans. </div>
<div> </div>
<div>The Reserve Bank of Australia (RBA) noted in its Financial Stability Review that an average of $120 billion of interest-only loans per annum are <strong><span style="text-decoration: underline;">due</span> </strong>for conversion between now and 2021.</div>
<div> </div>
<div>Nothing unknown there, though some people misread that as $480 billion of loans that <strong><span style="text-decoration: underline;">will</span></strong> convert to principal repayments, which isn't going to happen.</div>
<div> </div>
<div>Elsewhere, Moody's reported 30+ day delinquencies at 1.45 per cent, down from 1.52 per cent a year earlier, despite some trouble spots including Gladstone, central Queensland, some suburbs of Perth, and other parts of Western Australia. </div>
<div> </div>
<div>A final point, and a key outcome to watch over the days and weeks ahead is the impact of the Royal Commission into banking misconduct.</div>
<div> </div>
<div>It seems that borrowers will now be required to be provide statements on all debts, a loophole closure which appears likely to be a wise move. </div>
<div> </div>
<div>However, there could be some overreach in terms of brokers needing to audit bank statements to support declared living expenses broken down by category, the aim being to reduce the typical reliance on benchmarks. </div>
<div> </div>
<div>There are many problem with this, not least that borrowers tend to have multiple bank accounts and credit cards these days with different banks.<br><br>Certainly private banking clients and affluent borrowers have never been subjected to such scrutiny, which may lead to some interesting discussions! </div>
<div> </div>
<div>Given that loans are already being assessed at mortgage rates way in excess of the rate actually being paid, it seems like overkill.</div>
<div> </div>
<div>If implemented forcefully this will slow the mortgage market and reduce transaction volumes as brokers and borrowers get to grips with the new requirements.<br><br>Mortgage brokers would presumably also need to consider switching to a fee-for-service model to compensate for the exponential increase in paperwork and compliance.<br><br>Regulators in the UK went through their own mortgage market review (MMR) in 2014 which ultimately lowered the risk of borrowers over-stretching and made the industry more professional.<br><br>The MMR also temporarily gummed up the lending market, so we'll have to see what plays out Down Under. </div>
</div>
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Royal Commission to slow property lending: Pete Wargent

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<div>SQM Research reported its always-excellent vacancy rates index today for the month of May 2018, with vacancy rates nationally at 2.1 per cent, down marginally from 2.3 per cent a year earlier. </div>
<div> </div>
<div>And the figures showed a fifth consecutive decline for vacancies in Brisbane.</div>
<div> </div>
<div>Brisbane's city-wide vacancy rate was down to 2.9 per cent, from 3.5 per cent a year earlier. </div>
<div> </div>
<div>This accords well with what we've been seeing on the ground in Brisbane.</div>
<div> </div>
<div>Indeed, family-appropriate dwelling stock is now often renting at the first open home, with numerous instances of multiple offers and rentals achieving above the asking price. </div>
<div> </div>
<div>There are still some notable pockets of pain, of course, most evidently in the inner-city high rise 'investor stock', where rental guarantees mask what is often optimistically pitched product.</div>
<div> </div>
<div>There are also more high-rise units in the post for the CBD, with the SkyTower construction now well underway. </div>
<div> </div>
<div>Generally speaking and across the city, however, the rental market is rebalancing as construction slows, thanks to positive interstate migration and somewhat pacier net overseas migration, and is in better nick than a year earlier.</div>
<div> </div>
<div>Plotted below are the vacancy rate figures by capital city smoothed on a 6mMA basis (not seasonally adjusted). </div>
<div> </div>
<div>As you can see, while Brisbane has now turned a corner, Sydney is now experiencing a high rate of unit completions with considerably more new apartment stock choice for renters. </div>
<div> </div>
<div>Sydney's vacancy rate of 2.5 per cent was well up from 1.7 per cent in May 2017. </div>
<div> </div>
<div class="separator"><img src="https://2.bp.blogspot.com/-R1Whw2TAGEA/Wyh6EPlQOqI/AAAAAAAAqpM/hLFxcsPFy80keuHyZQR13T_y6O6xMJCrgCLcBGAs/s640/SQM1.jpg" width="640" height="362" data-original-height="800" data-original-width="1410"></div>
<p> </p>
<div>Elsewhere, Perth is grinding its way back from its punishing rental market nadir (please don't email about terminology: if you don't like it substitute with an antonym; it's really not that difficult!), while Hobart remains a tight rental market despite a slight loosening year-on-year.<br><br>It will be interesting to see at what point rising prices in Hobart spark a significant supply response, in what is a relatively small city, though some developers are reluctant to stray from the mainland due to the additional logistical challenges. </div>
<div> </div>
<div>Melbourne's vacancy rate was the same as it was a year earlier at just 1.4 per cent, despite hectic rates of dwelling construction. </div>
<div> </div>
<div>The Adelaide rental market has generally been tightening for some time now.<br><br>And finally, Canberra's rental vacancies have plummeted since the experiment with housing taxation, and it remains to be seen when a new rental market equilibrium is reached. </div>
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Brisbane rental guarantees mask optimistically pitched apartment product: Pete Wargent

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<div>And that, sadly, is that.</div>
<div> </div>
<div>Australia's auto production industry is no more. </div>
<div> </div>
<div>The Federal Chamber of Automotive Industries (FCAI) monthly figures recorded the production of one solitary vehicle in November. </div>
<div> </div>
<div>As recently as 2013 it was common to see 15,000-20,000 vehicles per month rolling off production lines.</div>
<div> </div>
<div>However, the persistently strong Aussie dollar and high cost of manufacturing in Australia ultimately proved to be an obstacle too far.  </div>
<p> </p>
<div class="separator"><a href="https://1.bp.blogspot.com/-KB8rLk_emuA/Wk_vB3kA82I/AAAAAAAAn0c/FeEKoG8c4_Y6mVuNjBMxdo0xHEA_P55EQCLcBGAs/s1600/B1.jpg"><img src="https://1.bp.blogspot.com/-KB8rLk_emuA/Wk_vB3kA82I/AAAAAAAAn0c/FeEKoG8c4_Y6mVuNjBMxdo0xHEA_P55EQCLcBGAs/s640/B1.jpg" width="640" height="390" data-original-height="812" data-original-width="1326"></a></div>
<div> </div>
<div>The Department of Employment <a href="http://petewargent.blogspot.co.uk/2017/11/the-car-in-front-is-import" target="_blank">projected</a> that the factory closures at Elizabeth in Adelaide (Holden) and Altona in Melbourne (Toyota) could cost 27,500 jobs over the years ahead.</div>
<div> </div>
<div>Many in the industry have been employed for more than two decades.<br><br>And consider how the world has changed since that time - there was no LinkedIn of Facebook back then, for example, and job applications were submitted on paper.</div>
<div> </div>
<div>While the full impact on supply chains is as yet unknown, and despite some better industry readings of late, the manufacturing industry remains in a structural decline, with total employment <a href="http://petewargent.blogspot.co.uk/2017/12/a-thousand-new-jobs-per-day" target="_blank">falling again in 2017</a>. </div>
<div><span> </span></div>
<div><span>I took a look at <a href="http://petewargent.blogspot.co.uk/2017/12/growth-hacking" target="_blank">here</a> at where future growth will come from instead.</span></div>
<div><span> </span></div>
<div><span><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></span></div>
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Growth after Australia's auto production industry is no more: Pete Wargent

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<div id="post-body-2358659028075496425" class="post-body entry-content">
<div>As usual vacancy rates were higher in the month of December at 2.5 per cent or 80,092 vacancies.</div>
<div> </div>
<div>Despite the record high level of building, vacancies were considerably lower than a year earlier, when there were 89,721 vacancies according to SQM Research figures.<br><br>The year-on-year decrease reflects a combination of strong population growth and a very high volume of higher-density apartments still under construction, there being a lag in the completion of this dwelling type. </div>
<div> </div>
<div>Hobart has a record low vacancy rate for any capital city of an extremely tight 0.3 per cent, while Canberra (1.3 per cent) and Adelaide (1.5 per cent) remain tight rental markets. </div>
<div> </div>
<div>Asking rents have increased strongly in Hobart and Canberra accordingly over 2017. </div>
<div> </div>
<div>Perth and Darwin also seem to have turned a corner, with vacancy rates well down from a year earlier, while Melbourne's 2.1 per cent vacancy rate was also well down from 2.4 per cent in December 2016.</div>
<div> </div>
<div>This downtrend wasn't the case everywhere however, with Sydney recording a multi-year high reading of 2.6 per cent in December, up from 2.3 per cent last year. </div>
<div> </div>
<div>The numbers can jag around a bit, but smoothing the figures on a 6mMA basis gives a sense of the relative condition of the rental market in each city and the prevailing trends. </div>
<br><div class="separator"><a href="https://3.bp.blogspot.com/-Piajs6T7H5I/Wl4_t1_nSNI/AAAAAAAAn8U/fmBZ8lYfqc4ko5vIMpvkfWOC5PMiqLASwCLcBGAs/s1600/SQM1.jpg" target="_blank"><img src="https://3.bp.blogspot.com/-Piajs6T7H5I/Wl4_t1_nSNI/AAAAAAAAn8U/fmBZ8lYfqc4ko5vIMpvkfWOC5PMiqLASwCLcBGAs/s640/SQM1.jpg" width="640" height="376" data-original-height="818" data-original-width="1385"></a></div>
<br><div>At the end of the 2017 financial year, New South Wales had a record 64,470 attached dwellings under construction, with the overdue flood of completions doubtless accounting for the jump in December. </div>
<div> </div>
<div>Population growth in Sydney nevertheless remains strong, so it will be interesting to see how the market fares in 2018.</div>
<div> </div>
<div>On that note, the latest building activity figures are due out today, and these will shed further light on completions and the pipeline remaining under construction. </div>
<div> </div>
<div class="separator"><a href="https://3.bp.blogspot.com/-UvrQILlqT8k/Wl5CUZV9A5I/AAAAAAAAn8g/urEYDDEt-ugkqXs6HFmF2TIgKJ5GRZfQQCLcBGAs/s1600/sydney-opera-house-354376_1920.jpg" target="_blank"><img src="https://3.bp.blogspot.com/-UvrQILlqT8k/Wl5CUZV9A5I/AAAAAAAAn8g/urEYDDEt-ugkqXs6HFmF2TIgKJ5GRZfQQCLcBGAs/s640/sydney-opera-house-354376_1920.jpg" width="640" height="426" data-original-height="1068" data-original-width="1600"></a></div>
<div> </div>
</div>
<div class="post-footer"> <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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Rental vacancies down in 2017; but not everywhere: Pete Wargent

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<div>One of the easier trades you'll ever come across, with inflation missing market expectations yet gain.<br><br>Money for jam, here.<br><br>Rate hikes never were on the cards any time soon - as well documented here often enough - but that's even more obvious now with inflation missing (yet again!).<br><br>
</div>
<div>Both of the core measures came in at just +0.4 per cent for the December quarter.</div>
<div> </div>
<div>While underlying inflation rate ticked up to +1.9 per cent, the 6-month annualised pace is incredibly weak at just +1.6 per cent.<br><br>Inflation has now missed the 2-3 per cent target on the downside for 9 consecutive quarters, and the pulse looks to have weakened again. </div>
<p> </p>
<div><img src="https://1.bp.blogspot.com/-XlzLIPRQpu4/WnEZzIZqnVI/AAAAAAAAoJU/rzj9H0OJ5NUP_8uwQveXyc47vGd8NtzuQCLcBGAs/s640/A1.jpg" width="640" height="388" data-original-height="826" data-original-width="1359"></div>
<p><br>Tradables prices picked up a bit in the December quarter, but were negative over the year.<br><br></p>
<div><img src="https://4.bp.blogspot.com/-Kxw_kvG6T8g/WnEZzNT9e7I/AAAAAAAAoJQ/v0T7c3gZZmc6pjln-mpGi6LhcMFX1ryUACLcBGAs/s640/A3.jpg" width="640" height="392" data-original-height="826" data-original-width="1346"></div>
<div> </div>
<div>The headline result of +0.6 per cent for the quarter and +1.9 per cent for the year was pumped by a jump in fuel and fruit prices (someone needs to look up whether avocados and capsicums are fruits or vegetables, I have no idea). </div>
<div> </div>
<div>Overall, though, this was once again very weak underlying inflation, though importantly the result was not under the Reserve Bank's forecast for the end of the year.</div>
<div> </div>
<div>So that basically means that interest rates will be left on hold for a record length of time, barring a shock of some kind.</div>
<div> </div>
<div>Rents off the mat</div>
<div> </div>
<div>Rents began to rise moderately again in 2017, mainly thanks to Sydney (+2.4 per cent).</div>
<div> </div>
<div>Rents were negative in the December quarter in Brisbane, while in Perth rents are some 16 per cent below their peak. </div>
<p> </p>
<div><img src="https://3.bp.blogspot.com/-J1Hs5n8pTqQ/WnEZzEsmQuI/AAAAAAAAoJY/eC-Oyr-Y9sAcEVWZFcCAcaZ0rol-BOElQCLcBGAs/s640/A2.jpg" width="640" height="374" data-original-height="818" data-original-width="1398"></div>
<p><br>Sydney rents (+52 per cent) have doubled the of inflation (+27 per cent) over the past decade.</p>
<p> </p>
<div><img src="https://1.bp.blogspot.com/-h8w2l0xyyCI/WnEZzng4KmI/AAAAAAAAoJc/fbvJr9MBycYnJXjOM2wyCEImtv1Gv0T_QCLcBGAs/s640/A4.jpg" width="640" height="374" data-original-height="828" data-original-width="1411"></div>
<p> </p>
<div>The wrap</div>
<div> </div>
<div>The Reserve Bank's models already seemed to suggest that underlying inflation wouldn't get back to the mid-point of the target range at 2.5 per cent for years to come (possibly about 4 years!). </div>
<div> </div>
<div>And now this result has missed market expectations too, for the fifth consecutive quarter. </div>
<div> </div>
<div>The main takeaway is all the talk of imminent rate hikes was little more than wishful thinking.<br><br>Indeed, given the Reserve Bank's stated mandate, logically either the next move in rates should be down or the economy should returning to full employment.<br><br>Either way, there was little to fear in these numbers for mortgagees and housing market fanatics.</div>
<div> </div>
<div>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>.</div>
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Talk of imminent rate hikes was little more than wishful thinking: Pete Wargent

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<div>EXPERT OBSERVER </div>
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<div>The latest available ABS figures show Australian capital city house and apartment prices 1.4 per cent below their December 2017 peak, albeit they've actually increased in Brisbane, Canberra, Adelaide, and Hobart. </div>
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<div class="separator"><img src="https://3.bp.blogspot.com/-Ya6Qb4aMVDo/W7zbQNm3zeI/AAAAAAAAsTE/y8JxatkGg3w13NZvQs7m5BCv0gMbGAgKQCLcBGAs/s640/A3.jpg" width="640" height="366" data-original-height="801" data-original-width="1394"></div>
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<div>One market - Sydney - did experience a wild buying frenzy in the first quarter of 2017, forcing some (required) action from the regulator, since which time house prices have declined by 4 per cent and apartment prices 3 per cent on the ABS index, with further declines set to follow in H2 2018.</div>
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<div>I was an agog observer at some of those Q1 2017 Sydney auctions, and concluded at the time that the successful frenzied bidders could only be cash buyers or downsizers, as there's no way the bank vals could've passed otherwise. </div>
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<div>Very few leveraged buyers would've bought in that narrow window before the froth was blown off, then, but if there's a cohort that will feel the pain of the market responding the tighter lending standards signal it's off-the-plan buyers of new CBD apartments. </div>
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<br>Although not overly familiar with Western Sydney I also witnessed some wild prices being paid for weatherboard renovators and fibro shacks, although all that seems to have calmed down now. </div>
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<div><em><span>PETE WARGENT </span>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>
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Australian housing off the peaks: Pete Wargent

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<div>EXPERT OBSERVER</div>
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<div>Despite the high rates of apartment construction, strong population growth continues to absorb the rental stock.<br><br>The total number of rental vacancies in Australia has declined over the past year from 75,733 to 72,748, according to the latest figures from SQM Research.<br><br>This represents a decline from in the national vacancy rate from 2.4 per cent to 2.2 per cent - while construction is now set to slow.</div>
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<div>SQM reported that Brisbane continues to experience a sustained 2018 decline in vacancy rates from 3.6 per cent in December to 2.9 per cent by July.<br><br>And this will likely continue as apartment construction falls away and migration from interstate picks up. </div>
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<div>Perth is also now through the worst with vacancy rates trending down (from 5.2 per cent to 4 per cent over the past year) and the oversupply of rentals easing a bit, after several years of rental price declines.<br><br>Meanwhile Adelaide tightened again into just 1.3 per cent - getting pretty tight down there now! - and Canberra...well, Canberra is heading for zero at this rate.<br><br><strong>Sydney indigestion</strong>
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<div>In Sydney number of vacancies was down from 19,572 to 19,114 in the month - a tight rental market would be represented by more like 12,000 vacancies or fewer - but year-on-year the vacancy rate is considerably higher at 2.8 per cent. </div>
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<div>Click <a href="https://4.bp.blogspot.com/-vinzV9mTVWw/W3JPxfzJ6JI/AAAAAAAArhg/DkJn_IkncbcIwHZt9WN1eAAv5j9VV9UjwCLcBGAs/s1600/SQM1.jpg" target="_blank">here</a> to enlarge</div>
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<div><a href="https://4.bp.blogspot.com/-vinzV9mTVWw/W3JPxfzJ6JI/AAAAAAAArhg/DkJn_IkncbcIwHZt9WN1eAAv5j9VV9UjwCLcBGAs/s1600/SQM1.jpg" target="_blank" rel="noopener noreferrer" data-auth="NotApplicable"><img src="https://4.bp.blogspot.com/-vinzV9mTVWw/W3JPxfzJ6JI/AAAAAAAArhg/DkJn_IkncbcIwHZt9WN1eAAv5j9VV9UjwCLcBGAs/s640/SQM1.jpg" width="640" height="356" data-imagetype="External"></a></div>
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<div>Sydney tends to be a much busier place in summer these days, so this trend will be one to watch with interest.</div>
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<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>
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