The final apartments in the most recently completed new development in Balwyn present some of the largest and most exclusive ever delivered in one of Melbourne’s most established and character-rich neighbourhoods.

Boutique developer&nbsp;<a href="https://www.apartments.com.au/developers/wulff-projects">Wulff Projects</a>,&nbsp;alongside partner <a href="https://www.apartments.com.au/developers/pga-group">PGA Group</a>, has just finished <a href="https://www.apartments.com.au/buildings/threadneedle-balwyn-1-5-threadneedle-street-balwyn-vic-3103">Threadneedle</a>, 17 home-sized residences designed completely for the owner-occupier.

Named after its location on Threadneedle Street, the new project has been shaped by the heritage fabric of Balwyn. It offers two low-rise buildings of eight and nine apartments respectively, designed to emulate traditional standalone homes.&nbsp;

[smartcode_project:default project_id=27816 project_image_fid=355582]

John Scaramuzzino, Director at <a href="https://www.apartments.com.au/architects/bruce-henderson-architects">Bruce Henderson Architects</a>, explains the design intention.

“Given the quiet residential character of the street with many homes dating back to the 1930s and 1940s, we approached Threadneedle wanting to appear less as a collection of apartments and more as a traditional residence. This led to creating not one but two buildings that could “breathe” with larger garden-based apartments functioning more like small homes.”

[smartcode_project:default project_id=27816 project_image_fid=355605]

The north-facing residences are nestled among extensive landscaped gardens by Ben Scott Garden Design, with over one-third of the site dedicated to greenery. The resulting setting is one of calm seclusion, where architecture and landscape work in tandem to offer immediate liveability.

With construction now complete, the final apartments include a top-floor, single-level penthouse residence priced from $2.8 million. This home offers three bedrooms, a dedicated study, two bathrooms plus powder room, and three car spaces with an oversized storage room.&nbsp;

Interiors prioritise spatial comfort and natural light, with three-metre-high ceilings, oversized internal doors and a full-width terrace oriented to the north, east and west.&nbsp;

[smartcode_project:default project_id=27816 project_image_fid=355604]

Floor-to-ceiling double-glazed windows ensure thermal performance across seasons, supported by automated external blinds, zoned heating and cooling, and a fireplace for added ambiance.

Each apartment has been individually designed to maximise privacy and garden outlooks. Kitchens combine refined finishes with practical considerations: stone benchtops, butler’s pantry, full-height joinery and concealed rangehoods.&nbsp;

The inclusion of dedicated home offices responds to contemporary living patterns, while bathrooms feature sculptural bathtubs and brushed nickel fixtures.&nbsp;

[smartcode_project:default project_id=27816 project_image_fid=355590]

Threadneedle also integrates best-practice sustainability measures, achieving a 7 Star average NatHERS rating. Initiatives include solar PV systems, rainwater harvesting for toilet flushing and irrigation, and high-performing building insulation. These elements enhance daily comfort while reducing ongoing maintenance and energy demand.

"We believe Threadneedle sets a new standard of design excellence and building quality for Balwyn,"&nbsp;Scaramuzzino added.

"It’s an architectural response we’re particularly proud of, and one we’re sure residents will be equally proud to call home."

[smartcode_project_cta:default project_id=27816]

Staff Writer

Final homes remaining as Threadneedle, Balwyn completes construction

Joel Robinson

Sydney's top 15 new apartments developments set to launch in 2026

Developer-builder <a href="https://www.apartments.com.au/developers/dasco-australia">DASCO</a> has pushed beyond the now-standard inclusions of rooftop pools and landscaped podiums at its recently launched new Epping project, Senso.

It has laid out over 4,000 sqm of resident-only amenity in a move designed to compete directly with low-density housing on livability, not just density. The result is a development that supports genuine daily use through purposeful spaces distributed across its five-building, 479-apartment precinct.

[smartcode_project:default project_id=134954 project_image_fid=4396]

Two rooftop pools form the anchor of Senso. One is a 27-metre lap pool adjoining a heated spa, designed for everyday fitness rather than just summer leisure. The second sits on a lower podium, allowing different buildings to share in vertical access and reducing crowding during peak times.

It is the secondary spaces that start to distinguish Senso from other large-scale suburban projects. A rooftop cinema is integrated into a landscaped terrace, offering open-air screenings with natural ventilation and passive cooling.&nbsp;

The inclusion of a “sensory walk”, an elevated boardwalk that threads through the site, suggests a rare investment in non-commercial, non-essential amenity: space for quiet movement that doesn’t double as access or traffic circulation.

[smartcode_project:default project_id=134954 project_image_fid=4402]

The gym and wellness centre, often relegated to a small ground-floor room in many builds, takes on more substance here. Residents have access to a fully equipped gym, as well as outdoor yoga areas and meditative zones that integrate greenery and natural light.&nbsp;

The Club Lounge is similarly designed to support multiple use cases, with a private dining terrace, kitchenette, workspace, and lockable wine storage. These aren’t superficial additions; their scale and spatial allocation indicate serious intent for frequent resident use.

[smartcode_project:default project_id=134954 project_image_fid=4391]

Importantly, Senso’s amenities are embedded within a site that spans more than 10,000 sqm, allowing for better separation between spaces and reduced noise spillover, a critical but often overlooked factor in high-density developments. This spatial generosity also enables multiple alfresco kitchens and communal terraces without compromising individual privacy or usable space.

While many developments make claims about lifestyle, few back it with this level of built infrastructure. Senso’s mix of dedicated fitness, wellness, social and passive green spaces suggests a conscious response to the post-pandemic shift in housing expectations, especially among owner-occupiers.&nbsp;

DASCO is one of several leading developers who have taken out Resilience Insurance's Latent Defects Insurance policy, providing buyers with a 10-year structural and waterproofing warranty, and giving them the ultimate peace of mind.

Senso is scheduled for completion in late 2028.

[smartcode_project_cta:default project_id=134954]

The outdoor amenities elevating life at Senso, Epping

Following the proposal by the Minns Labor Government to rezone Parramatta Road to create up to 8,000 new homes, prominent developer Ceerose has gone to the NSW Gov to increase the density of its new mixed-use residential building in Leichhardt.

<a href="https://www.apartments.com.au/builders/ceerose">Ceerose</a>, founded by Edward Doueihi nearly three decades ago, has filed plans for 154 apartments above ground-floor retail at 307-315 Parramatta Road, a key corner site near Norton Street, the main high street strip in Leichhardt.

It's an upsize from the previously approved scheme of 63 apartments across a seven-storey building.

<img alt="Ceerose" data-entity-type="file" data-entity-uuid="ba1ae75b-5f08-43fb-b8d5-3de6d9f6ef71" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202025-12-04%20at%2010.31.39%E2%80%AFAM.png?VersionId=yA3hBBLPH4ev7MsAE0_hieXeqiFqBUb7" />

The project is being advanced through the State Significant Development (SSD) pathway, with concurrent rezoning sought to facilitate the proposal. The 10-storey development would rise over a four-level basement and deliver two retail tenancies, one a larger-format offering and the other a smaller “hole in the wall” space, addressing the Parramatta Road frontage. 21 of the apartments are dedicated as affordable housing.

According to the Urban Design Report by Architecture AND, the scheme includes a podium and tower configuration, with a fine-grain, two-storey parapet street wall that references the traditional shopfront rhythm along the corridor. “An elegant tower form is proposed, combined with a characterful two storey frontage... articulating it as two related buildings, providing consistency with the rhythm and grain of Parramatta Road,” the report notes.

The residential component is split across two slender towers set back from the street edge, a design move aimed at preserving solar access and reducing perceived bulk. This massing strategy also seeks to improve residential amenity by focusing scale toward the quieter northern interface, away from Parramatta Road’s noise and pollution.

<img alt="Ceerose" data-entity-type="file" data-entity-uuid="347f2f8f-5d36-4388-b40a-2e77380b9c19" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202025-12-04%20at%2010.31.02%E2%80%AFAM.png?VersionId=xvyUE2ujT1lzivXTo.mHBJFF4SmfgLtz" />

Architecture AND has worked with Ceerose on previous Inner West projects, and cites a deep familiarity with the local character. Their design draws heavily on context, heritage, and sunlight access considerations, and engages with the Inner West Council’s “Our Fairer Future” strategic planning framework.

The site spans 2,712 sqm and is located near key intersections with Catherine Street, Hay Street, and Redmond Street. It adjoins a public carpark to the north and is within walking distance of Stanmore and Petersham stations. It is also flagged in state and local planning strategies, including the Parramatta Road Corridor Urban Transformation Strategy, as a suitable candidate for increased density.

Ceerose recently completed The Alex Collective on McEvoy Street in Alexandria, Abbie's Lane in Annandale, and the award-winning Munro House in Elizabeth Bay.

The Parramatta Road corridor is coming to life with the proposed rezoning which is serviced by a significant number of bus, light rail and train routes.

Deicorp is progressing with its $1.8 billion <a href="https://www.apartments.com.au/new-apartments/kings-bay-village-five-dock-53-75-queens-road-five-dock-nsw-2046">Kings Bay Village</a> precinct on Parramatta Road in Five Dock, as is <a href="https://www.apartments.com.au/news/nsw/toga-to-push-on-with-five-dock-mixed-use-masterplan">TOGA further down the street</a>. Those two projects alone will bring nearly 2,000 new homes to Parramatta Road.

First look: Ceerose plots mixed-use Leichhardt development on Parramatta Road

North Sydney's landmark 'SBS Building' on Alfred Street is set to be demolished to make way for a new mixed-use residential tower in the booming North Sydney.

Commercial property group FiveX is behind the plans for a <a href="https://www.apartments.com.au/new-apartments/275-alfred-street-north-north-sydney-nsw-2060">39-storey tower</a>, the latest project to advance under the NSW Government’s Housing Delivery Authority pathway.

They are proposing 184 apartments above retail spaces, which will replace the existing 20-storey commercial building. FiveX was set up more than five decades ago by Joshua and Marko Berger. It is currently led by Joshua's son Lesli.&nbsp;

<img alt="First look: Fivex plans 39-storey residential tower at 275 Alfred Street, North Sydney" data-entity-type="file" data-entity-uuid="2efa0980-53fa-4cca-9f9e-9c3c845d4746" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Article%20Feature%20Image%20%28Grid%29%20%281%29_0.png?VersionId=y_YyPMq3NQLfYRs84pP4os9UgWiMLp75" />

According to the Architectural Design Report by <a href="https://www.apartments.com.au/architects/fjc-studio">FJC Studio</a>, the slender tower form has been deliberately designed to respect the site's transitional setting at the southern gateway to the North Sydney CBD, where high-rise towers give way to lower-scale residential precincts.

"The slender tower form and articulated podium establish a respectful relationship with nearby heritage and low rise buildings, including the Whaling Road Heritage Conservation Area,” the architecture firm noted, adding that the tower “completes a missing link in the urban fabric” while enhancing the Alfred Street streetscape.

The proposed building will include a mix of one-, two- and three-bedroom apartments, with 15 percent of the gross residential floor area allocated as affordable housing. There is an agreement already in place that those apartments will be managed by Evolve Housing.

The project aligns with broader state housing objectives, including the National Housing Accord target of delivering 1.2 million new homes by 2029. The Scoping Report filed with the State Significant Development Application (SSDA) suggests the site "presents no impediments to rapid delivery,” with construction able to commence within 12 months of receiving consent.

North Sydney has been one of the most popular suburbs in Sydney for new and off the plan apartment development, but hasn't had the supply to keep up with demand, until recently.

AURA by Aqualand was, for a long time, the only off the plan apartment building on the market. That completed last year, and has sold the majority of its 386 luxury apartments. Recently ALAND launched <a href="https://www.apartments.com.au/new-apartments/the-walden-173-179-walker-street-north-sydney-nsw-2060">The Walden</a> on the same street, selling over $100 million within just a few hours of its launch, while developer CASA also launched&nbsp;<a href="https://www.apartments.com.au/new-apartments/the-mclaren-north-sydney-45-mclaren-street-north-sydney-nsw-2060">The McLaren</a>&nbsp;in the same precinct.

First look: Fivex plans 39-storey residential tower in booming North Sydney

Prices Bottomed

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The decline in property prices continued in the June quarter and will most likely mark the bottom of the cycle, according to the latest research from the Real Estate Institute of Australia. 
REIA president Adrian Kelly said REIA Real Estate Market Facts for the June 2019 quarter show weighted average median prices decreased by 1.0 per cent for houses and by 0.6 per cent for other dwellings.  
“This is a continuing decline since June 2018 for both houses and other dwellings, but the decline is slowing,” Kelly said.   “The weighted average median price for houses for the eight capital cities decreased to $720,041 over the quarter, with prices decreasing in all capital cities except for Canberra and Hobart.  “The weighted average median price for other dwellings decreased to $565,753 over the quarter, with prices decreasing in all capital cities except for Melbourne, Hobart and Darwin.”  Kelly said whilst the total number of new finance commitments for the quarter were down 15.1 per cent over last year, including first home buyers down 7.6 per cent it needs to be remembered that the Federal election was held in the middle of the quarter. “There was considerable uncertainty regarding the outcome and concern about changes to property taxation and its impact should there be a change in Government. 
“With the post election boost in confidence in the real estate market as evidenced by higher levels of enquiry, two cuts in interest rates and changes in APRA’s requirements, the June quarter will most likely mark the bottom of the cycle. “Lending figures for the month of June 2019 show, in seasonally adjusted terms, that the number of owner occupied finance commitments excluding refinancing increased by 0.4 per cent.
"The value of investment housing commitments, excluding refinancing, increased by 0.5 per cent in June with the rise driven by the first rise in New South Wales since April 2018.” 
 
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Market hit the bottom in the June quarter: REIA

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EXPERT OBSERVER
The Sydney housing market has bottomed out. Many leading indicators now suggest the current September quarter will record about a 2% rise in Sydney dwelling prices and we are expecting a rise of another 4% for the December Quarter. That should take the full year to about a 1% gain compared to 2018.   But let it be known Sydney has bottomed out at an overvalued point. The data suggests the Sydney housing market remains 21% overvalued despite the two year correction. For reference, the average overvaluation (since 1986) in Sydney is 19% with a low point of 5.9% ‘undervalued’ in June 1987 and a high point of 55.5% overvalued in December 2003.  The most recent overvalued point was 51.6% in the June Quarter 2017. The most recent undervalued point was 1.6% undervalued in September 2012.   This is all based on our view that there is a relationship between nominal GDP and house prices. And when you read this chart we think the evidence is there. Logically there should be a relationship. Housing price rises cannot outpace income growth forever. And the more the gap between the two, the more housing prices have to be supported by cheaper and easier access to credit.   Historically, the Sydney housing market has rarely been undervalued. There has nearly always been some sort of premium attached.
To enlarge, <a href="https://gallery.mailchimp.com/9badbd870addb4af72206c2eb/images/4c539bd2-4f54-4a6b-8cad-28e2a88d92d8.png" target="_blank">click here</a>.   <img src="https://gallery.mailchimp.com/9badbd870addb4af72206c2eb/images/4c539bd2-4f54-4a6b-8cad-28e2a88d92d8.png" width="800" height="444">
Effectively the current point suggests, that, left unchecked, we could soon be heading towards yet another historic overvaluation point similar to levels recorded in 2003 and 2017.
The key word though in this is “unchecked”. How will the regulators respond when they read newspaper headlines of a new booming Sydney housing market recording annualised double digit percentage price growth?     Our initial thinking is they are unlikely to respond well and may introduce more lending restrictions once again. Then again, if the powers that be feel cornered due to perhaps rising unemployment pressure or the need to hit inflation targets, etc., they may well let the market run.   And then finally consider what happens if we have another rate cut?
Louis Christopher is the managing director of <a href="https://sqmresearch.com.au/" target="_blank">SQM Research</a>.
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Sydney housing market has bottomed out: SQM's Louis Christopher

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The ANZ Bank has revised its forecast and now sees the bottoming of the housing market "in the coming months" following the policy turnaround. 
Economists Felicity Emmett and Adelaide Timbrell have forecasted prices will rise modestly through to the end of 2019.
They expect a three percent growth in 2020.
"After a period of significant weakness, house prices appear to be stabilising," their latest Australian Housing Update read.
"Sydney prices have fallen 15%, while Melbourne’s are down 11%," they advised.
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/7/16/Monthly%20housing%20prices%20ANZ.jpg" alt="">
"Brisbane prices have fallen only modestly, while Adelaide prices have been broadly stable.
"Perth remains weak, but Hobart has been a standout.
They cite the election result, back the back RBA cash rate cuts and APRA loosening their lending serviceability have all contributed to the quickening of the end of the downturn.
"All of these factors have helped to shift sentiment from one of pervasive negativity to cautious optimism," Emmett and Timbrell said.
They warned however against a property boom that we saw from 2012 to 2017.
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/7/16/Capital%20city%20prices%20v%20auction%20results%20ANZ.jpg" alt="">
"While the outlook definitely looks more positive, we do not expect a V-shaped recovery for prices," the report noted.
"Our view for some time has been that the tightening in credit has been the major driver of weakness, and while there has been some easing at the margin, changes to the use of Household Expenditure Measure (HEM) and the introduction of comprehensive credit reporting will offset some of the impact.
"Moreover, there is still a substantial amount of supply coming on stream, particularly in Sydney where the rental vacancy rate is at a 15-year high.
"This all suggests that the recovery is likely to be a fairly modest one.
 
 
 
 
 
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ANZ sees bottoming of the housing market in coming months

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EXPERT OBSERVER
The residential downturn is expected to reach bottom in most Australian markets by as early as the end of 2019 or early 2020 – much sooner than previously predicted.
In the February release of CBRE’s Real Estate Market Outlook 2019 report we identified the Banking Royal Commission and the federal election as the two ‘unknown’ factors influencing Australia’s residential market outlook.
Signs are now emerging that a controlled relaxation of credit constraints was being managed and forecast interest rates cuts would help stabilise property prices.
The strong likelihood of further rate cuts by the RBA over the remainder of 2019 is expected to boost the prospects of an earlier than anticipated market recovery.
The results of the Banking Royal Commission and federal election would provide some comfort across the remainder of the year, increasing the number of buyers looking to enter residential markets, providing stronger support for prices and bringing forward the cyclical market bottom into 2019.
The federal election’s unexpected result and the relaxation of certain credit market constraints have provided a catalyst for market change.
The Coalition victory means proposed taxation changes impacting investment property, including negative gearing and capital gains tax changes, are off the agenda, while first home buyers have received a modest additional assistance package. The residential markets in general are expected to continue working through their adjustment cycle, with credit availability remaining the key constraint at present.
The results of the Banking Royal Commission were creating a more sustainable credit environment underpinning residential markets, resulting in an arguable credit market overcorrection, with banks appearing to have adjusted their requirements to reflect ‘responsible lending’ practices.
CRAIG GODBER is the Head of Residential Research for CBRE
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Slowing residential headwinds bring market bottom forward: CBRE's Craig Godber

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EXPERT OBSERVER
The negatives weighing on Australian residential property prices remain significant but the past few weeks have seen a number of developments that suggest that prices could bottom earlier and higher than we have been expecting.
The election outcome removed a key threat, but several other factors also help. 
The biggest home price fall in the last 40 years
According to CoreLogic data, capital city dwelling prices are down 9.7% from their September 2017 high, which is their worst decline in the last 40 years.
Of course, there is a huge range here with prices down from their top by 15% in Sydney, 11% in Melbourne, 28% in Darwin, 18% in Perth, 2% in Brisbane, less than 1% in Adelaide and at record highs in Canberra &amp; Hobart
Drags on house prices remain significant…
The decline in prices reflects a range of factors, most notably, a “correction” to the huge surge in prices into 2017 in Sydney and Melbourne that left prices very overvalued relative to income, rents and their long-term trend and affordability very poor and household debt very high. 
The end of the mining investment boom impacting prices in Perth and Darwin since their peak in 2014. 
 <img src="https://www.urban.com.au/images/2019/5/23/shallow%201.JPG" alt="">
A tightening in lending standards that initially cracked down on lending to investors but since 2017 moved on to interest only loans and then a more fundamental focus around credit quality which made it harder to get loans. 
A surge in the supply of units to record levels which has led to rising rental vacancy rates in Sydney. 
An 80% collapse in foreign demand. 
A big pool of interest only borrowers switching to principal and interest loans driving higher debt servicing costs. 
Price falls feeding on themselves – just as the boom in prices was accentuated by a fear of missing out (FOMO), falling prices are driving falling price expectations &amp; leading to reduced demand and FONGO (fear of not getting out). 
Investors started to factor in some probability that Labor would win the election which would have meant that negative gearing would be restricted and the capital gains tax discount halved – with estimates that this could have knocked another 5-10% from property prices.
The negatives weighing on the housing market remain significant. In particular, credit conditions are still tight with housing finance still falling with a brief bounce in February giving rise to further falls in March and the start-up of Comprehensive Credit Reporting which will see banks crack down on borrowers with multiple undeclared loans. And the pipeline of units to hit the Sydney and Melbourne markets is still huge as reflected in a still high crane count.
<img src="https://www.urban.com.au/images/2019/5/23/Shallow%202.JPG" alt="">
Meanwhile, auction clearance rates in Sydney and Melbourne have risen from their December lows but this looks largely seasonal with clearances still weak at pre-boom levels just above 50% as are sales volumes.
What’s more the number of capital cities seeing monthly price falls has gone from three out of eight a year ago to now seven out of eight. Given all these considerations we have been reluctant to read too much into the slowing in downwards momentum in monthly property price falls in recent months, particularly given that Perth and Darwin have seen several phases where price declines slowed then sped up again during their five-year slump. And Australian housing still remains expensive.
Real house prices have fallen from 27% above their long-term trend to 7% above now, but housing is still expensive compared to incomes and rents. Sydney home prices may have fallen 15% from their 2017 high but this was after a 75% gain since 2012 when wages rose just 14%. And household debt remains very high.
…but some positives are starting to creep in
However, while the drags remain significant several positives have become apparent over the last few weeks. First, financial support for first home buyers is now on the way with the Government’s First Home Loan Deposit (underwriting) Scheme.
On its own it’s not a game changer particularly given that it’s capped in terms of numbers, the borrowers will be taking on bigmortgages, which will come with a higher risk of negative equity, borrowers will still have to meet the tougher credit standards of recent times and it won’t kick in until next year.
That said, with the Federal budget looking even healthier and probably already in surplus thanks to the surging iron ore price, I suspect that the deposit scheme will morph into a far more attractive home buyer grant at some point. Second, APRA is looking to relax the 7% mortgage rate serviceability buffer.
This was inevitable given APRA’s move to focus on more fundamental credit standards and 7% is way out of whack with current interest rates. Again, on its own it’s not a game changer - it wasn’t the main driver of the property downturn and borrowers still have to meet tougher credit standards. And don’t forget that relaxation of the 10% cap on growth in investor loans and the 30% limit on interest only loans last year had little impact. But it may help at the margin.
Third, RBA Governor Lowe has all but confirmed that rate cuts are on the way with his comment that “at our meeting in two weeks’ time, we will consider the case for lower interest rates” after observing that it needs lower unemployment to get inflation back to target.
We expect 0.25% rate cuts in June and August and that the bulk of these will be passed on to borrowers given the recent reduction in bank funding costs. This would be a bit earlier than the August and November rate cuts we were assuming back in January when we last reviewed our house price forecasts.
House prices bottomed around three months after the first cuts in 2008 and 2011. It may take longer this time as debt is now much higher, rates are already very low and lending standards are tougher. But they will still help. Finally, the threat of changes to negative gearing and CGT is gone with Labor’s defeat.
So a big negative for property is gone. Given the difficulty in predicting the election our house price forecasts had allowed for a 50% probability (ie 50/50 Labor would win) of an 8% additional drag on prices in Sydney and Melbourne from this, ie 4%. In other cities it was a bit less. Now it’s zero and we need to remove this from our forecasts.
It’s also worth noting that we have not seen much evidence of panic selling or forced selling by the banks despite rising (but still low) levels of negative equity. Mortgage delinquency rates remain relatively low – even in Perth where prices have fallen 18% and unemployment has spiked.
<img src="https://www.urban.com.au/images/2019/5/23/shallow%203.JPG" alt="">
Meanwhile, strong population growth of around 1.6% pa is still driving strong underlying demand for housing at a time when supply is likely to start slowing again next year (given falling building approvals). And vacancy rates while very high in Darwin and above trend and rising in Sydney are actually benign to low in most capital cities and have collapsed in Perth.
So taking all these things together – some of which are minor but are still positive – it’s likely that we are going to see house prices bottom out a bit earlier and higher than we had expected.
What about the risk of higher unemployment?
The main risk is that Australia slides into a downwards spiral as the housing downturn - maybe in concert with a global slump - triggers a surge in unemployment which triggers rising defaults and a further plunge in house prices ultimately causing 30% plus falls in national property prices.
This is still a risk, but we remain of the view that it will be avoided. The housing cycle downturn will lead to the loss of around 60,000 jobs on our estimates. But there are a number of other things that will keep growth going – albeit at a slower pace than the RBA and Government are assuming – but which should be enough to stop unemployment surging beyond 6% and feeding back to become a bigger threat to house prices.
Infrastructure spending is strong, resources investment is close to the bottom, non-mining investment is looking healthier, tax cuts for low and middle income earners next quarter (whether paid upfront or backdated a few weeks later when passed by Parliament) will provide some help, fiscal stimulus is likely to be increased helped by the windfall from the surging iron ore price and rate cuts will provide some help fo households with a mortgage.
Yes, the trade war could spiral out of control – but this probably means more stimulus from China which provides an offset for global growth and explains why the iron ore price keeps rising. The other big risk is that investors decide to exit in the face of low net rental yields &amp; diminished capital growth expectations.
Revised house price forecasts
Our forecasts for national average prices have been for a price fall of 15% top to bottom (of which we have done 10% so far) and for Sydney and Melbourne it’s been for a price fall of 25% top to bottom (of which Sydney has already done 15% and Melbourne 11%) and for prices to bottom in 2020.
Reflecting the considerations discussed above – notably the removal of the threat of changes to negative gearing and capital gains tax, imminent rate cuts, assistance for first home buyers and APRA’s relaxation of the 7% serviceability test - we are revising the estimate for Sydney home prices to a 19% top to bottom fall, Melbourne to 15% top to bottom (partly because it has been holding up much better likely reflecting stronger population growth) and the national average to 12% top to bottom with prices likely to bottom by year end.
However, given still poor affordability, still very high debt debt levels, tighter lending standards and rising unemployment a quick return to boom time conditions is most unlikely.
More likely is a lengthy period of constrained range bound house prices after they bottom later this year (although I thought the same around 2011-12 – but things are different now!).
DR SHANE OLIVER Head of Investment Strategy and Chief Economist AMP Capital
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Australian house prices approaching the bottom, it looks shallow: Shane Oliver

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Darwin property owners seeking a sale in the first quarter of 2018 should recognise the city’s housing values have bottomed, according to leading real estate group, Raine &amp; Horne. 
“Investment firm AMP Capital l<a name="x__ednref1" href="x-webdoc://DC3B27C2-F28F-4666-9E47-11992185BC89#x__edn1" title=""></a>ast week indicated that the Darwin real estate market has bottomed, which means that local owners should feel less pressure to take the first offer from a buyer,” said Glenn Grantham, general manager at Raine &amp; Horne Darwin.
“The Darwin property market in fact reached the bottom of the price cycle a few months ago, yet there still seems to be many owners believing they must take the first offer that comes their way.”
The failure by owners to recognise that prices have bottomed can be as costly as paying too much at the top of the market cycle, advised Grantham.
“We have heard of instances where some owners at the end of 2017 were accepting auction bids that were considerably lower than the going market rate.
“With the Darwin property market now at the bottom of the cycle, it’s critical that owners work with real estate agents, such as Raine &amp; Horne, who will put their interests first, and secure them the best price possible.”
Markets such as apartments in central Darwin and houses in Palmerston are set to be major buying hotspots in 2018.
“If you recognise that Darwin has reached the bottom of the price cycle, then you need to look at the sub-markets where prices have been most affected,” said Mr Grantham.
“In this regard, it’s hard to go past apartments in the centre of Darwin and houses in Palmerston.”
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2018/1/17/darwin3.jpg" alt="">
The median 3-bedroom house price in Palmerston is $300,000 and mid-$400,00s for a four-bedroom house, according to Raine &amp; Horne Darwin.
“Inner city, two-bedroom apartments start from around $300,000, and this is the market where we’re seeing more investor activity,” said Mr Grantham.
The wet season which extends to April coincides with an influx of interstate workers moving to Darwin for government and defence work.
“Many of the transient workers buy a Darwin property to live in, before transitioning it to the rental market when they leave,” noted Mr Grantham
“Almost 90% of investors are from interstate who move to Darwin for short to medium periods and recognise its property market offers the prospect of immediate price affordability and long-term growth. 
“Workers from interstate often purchase Darwin properties with an understanding that when they leave, they’ll keep it as an investment asset that can produce growth and income yields significantly higher than the southern capitals.”
Raine &amp; Horne Darwin has 66 properties on their books.
Their priciest is an apartment in the <a href="https://www.realestate.com.au/property-apartment-nt-darwin+city-119146115" target="_blank">Evolution on Gardiner</a> building in the city which has views of the water (top and above).
Agents Glen Grantham and Dan Campbell are asking for $985,000 for the three bedroom, two bathroom apartment.
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2018/1/17/darwin2.jpg" alt="">
Grantham and Campbell are also marketing an off the plan townhouse in the <a href="https://www.realestate.com.au/property-townhouse-nt-the+gardens-123840718" target="_blank">Terrace Gardens project</a> (above).
The three bedroom, two bathroom townhouse is priced at $825,000.
There has only been one Darwin sale by the Raine &amp; Horne Darwin team this year. That was an <a href="https://www.realestate.com.au/sold/property-apartment-nt-darwin+city-120654785" target="_blank">apartment in the Marrakai complex</a> (below) which sold for $350,000.
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2018/1/17/marrakai.jpg" alt="">
The ninth level apartment with two bedrooms and two bathrooms last traded for $245,000 in 2000 and had been on the market for over two years.
It initially sought a price between $520,000 and $550,000.
A unit Raine &amp; Horne sold in Cullen Bay went back in price late last year when it sold for $485,000.
The two bedroom apartment overlooking Cullen Bay Marina last sold for $620,000 in 2008, and even $500,000 in 2007, still above its price today 10 years later.
 
 
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