Developers and apartment buyers have a narrowing window of opportunity before Brisbane's Olympic infrastructure pipeline begins competing directly with residential construction, pushing up costs, tightening labour supply and making new projects increasingly difficult to deliver.

While Brisbane's apartment market continues to benefit from strong population growth and limited housing supply, industry research suggests the years leading up to 2027 could prove to be the most important period for developers looking to secure builders and buyers hoping to purchase before the next wave of price increases.

A new Colliers report, Brisbane 2032 Olympic and Paralympic Games: Creating Solutions, highlights the scale of the challenge. While thousands of new homes are planned across South East Queensland, the Brisbane Olympic Athletes Village alone will deliver more than 10,500 beds during the Games before being converted into around 1,750 to 2,000 apartments. Equivalent to almost two years of typical inner-city apartment supply, the project will also absorb a significant share of the construction workforce and building materials.

The broader construction pipeline paints an even clearer picture.

Construction Skills Queensland's Horizon 2032 report forecasts Queensland's annual construction pipeline will average $69 billion over the coming years before peaking at $75 billion in 2027-28. Demand for construction workers is expected to increase by 17 per cent to almost 150,000 people, with the industry facing an annual shortfall of around 19,000 workers that could blow out to as many as 35,000 during the peak construction period.

The Olympic venues, athletes village and supporting infrastructure will account for billions of dollars worth of work across South East Queensland through to 2032, creating intense competition for labour at a time when Australia's residential construction sector is already under pressure.

[smartcode_project:default project_id=150489 project_image_fid=373834]

Colliers Queensland Residential Director Andrew Scriven said the convergence of these projects is creating a clear window of opportunity for both developers and buyers.

"From 2027 onwards, the market will shift dramatically," Scriven said.

"Labour will increasingly be locked into government-led infrastructure and Olympic projects, which means private residential developments will face higher costs and tighter margins. The developers who move now are the ones most likely to get projects off the ground."

Scriven said the same dynamic would also affect buyers, with fewer apartment projects expected to launch once construction capacity tightens.

"If you're looking to change your lifestyle over the next five years, now is your window of opportunity to buy."

[smartcode_project:default project_id=150713 project_image_fid=373827]

Developers are already positioning themselves ahead of that window.

Following the success of Monarch at Toowong, Consolidated Properties is preparing to launch two new Brisbane apartment projects in the second half of 2026. They include <a href="https://www.apartments.com.au/new-apartments/gloriette-30-bedivere-street-yeerongpilly-qld-4105">Gloriette</a> at Yeerongpilly Green, a 25-storey tower within one of Brisbane's key Olympic precincts, and <a href="https://www.apartments.com.au/new-apartments/castile-47-skyring-terrace-newstead-qld-4006">Castile</a>, a recently approved 25-storey riverfront development at 47 Skyring Terrace in Newstead.

Hutchinson Builders will deliver both projects, with early works already underway at Yeerongpilly and Newstead expected to commence later this year.

The timing comes as Brisbane's fundamentals continue to strengthen, with strong interstate migration, population growth and vacancy rates remaining below 1.5 per cent.

Colliers Queensland researcher Pragya Sharma said Greater Brisbane is forecast to require around 40,000 new apartments between 2021 and 2031.

"There's a real mismatch emerging between when housing is needed and when it will be feasible to build," Sharma said.

"As a result, the period leading up to 2027 presents a key window of opportunity for developers to secure approvals, funding and construction capacity, while buyers will have greater choice before supply constraints intensify."

Colliers research outlines a critical pre-2027 window to start residential projects before labour squeeze: now is the time to buy

Joel Robinson

Developers, buyers on watch in South East Queensland ahead of construction crunch: Colliers

It's taken less than nine months for developer Sherpa Property Group to sell out all 51 apartments in its <a href="https://www.apartments.com.au/new-apartments/flourish-oasis-palm-beach-7-9-sixth-avenue-palm-beach-qld-4221">Flourish Oasis</a> development in <a href="https://www.apartments.com.au/developments/palm-beach-qld-4221">Palm Beach</a>, over a year before its anticipated completion.

&nbsp;

Located at 7-9 Sixth Avenue, the $67 million development has resonated strongly with both local owner-occupiers and downsizers seeking high-quality apartments within walking distance of the beach, dining precincts and everyday amenities.

[smartcode_project:default project_id=151449 project_image_fid=357458]

Christie Leet, Founder of <a href="https://www.apartments.com.au/developers/sherpa-property-group">Sherpa Group</a>, said the sell-out reflected both the strength of the Palm Beach market and the success of Sherpa's community-first approach to development.

"The sell-out of Oasis is a fantastic outcome and reinforces the strong demand we're seeing for thoughtfully designed apartments in lifestyle locations," Leet said.

"From the outset, our vision was to create a development that genuinely enhanced the Palm Beach community while providing residents with exceptional homes and wellness-focused amenities.

"We've been incredibly encouraged by the level of local support throughout the campaign, 72.5 per cent of buyers are locals, with a significant proportion of purchasers choosing Oasis as their future home rather than an investment."

[smartcode_project:default project_id=151449 project_image_fid=357463]

Construction is now progressing following development approval, with trusted builder LPS Group delivering the project and completion anticipated in Q3 2027.

Oasis forms part of Sherpa Group's successful Flourish collection, which has become recognised for its focus on wellness, community and elevated coastal living.

[smartcode_project:default project_id=151449 project_image_fid=357469]

Residents will have private access to a rooftop amenity space featuring a pool, gym, sauna, steam room, hot and cold plunge pools, spa and barbecue facilities.

"The success of Oasis demonstrates that buyers continue to prioritise quality, location and lifestyle," Leet said.

"We are proud to have delivered a project that has resonated so strongly with the market and look forward to bringing Oasis to life for our future residents."

Sherpa recently launched <a href="https://www.apartments.com.au/new-apartments/flourish-soleira-palm-beach-1150-1160-gold-coast-highway-palm-beach-qld-4221">Flourish Soleira</a>, its third instalment of the Flourish brand in Palm Beach following Flourish Oasis and <a href="https://www.apartments.com.au/new-apartments/amargo-6-12-sixth-avenue-palm-beach-qld-4221">Flourish Amargo</a>.

[smartcode_project_cta:default project_id=151449]

Sherpa sells out Flourish Oasis in booming Palm Beach

Urban Property Group's <a href="https://www.apartments.com.au/new-apartments/la-vera-macquarie-park-94-talavera-road-macquarie-park-nsw-2113">La Vera</a> is leading the next phase of Macquarie Park's residential evolution, with the new apartment development set to become the first of several new apartment projects in the precinct to complete.

The 169-apartment building has now topped out ahead of its scheduled completion in the third quarter of 2026, as new residential investment continues to reshape one of Sydney's largest employment hubs into a true mixed-use precinct.

[smartcode_project:default project_id=134951 project_image_fid=368645]

Cox Architecture has designed La Vera to capture the best of its unique positioning on Talavera Road, orienting the building towards Lane Cove National Park.&nbsp;The building features a sculpted northern façade with flowing curves inspired by the surrounding landscape, while its city-facing elevation adopts a more structured architectural expression to maximise skyline views.

"The vision for the project was to conceive a building that adopted an organic and curvilinear form to the northern portion that faces the Lane Cove National Park," <a href="https://www.apartments.com.au/architects/cox-architecture">Cox Architecture</a> Director Felipe Miranda said.

"The residents that reside in the northern portion of the building benefit by having beautifully crafted curved balconies that speak to the natural context and heighten the relationship of their internal living spaces to the external balconies."

[smartcode_project:default project_id=134951 project_image_fid=358802]

La Vera offers a diverse mix of one, two, three, and four-bedroom configurations, with prices currently starting from $740,000. Buyers so far have been a mix of Sydney-based investors,&nbsp;metro commuters, owner-occupiers and downsizers from surrounding North Shore suburbs.

Both investors and owner-occupiers have been drawn to La Vera's proximity to Macquarie University, Macquarie University Hospital, Macquarie Centre and the Sydney Metro, infrastructure that supports both strong rental demand and a convenient lifestyle for residents.

The apartments feature full-height glazing, timber flooring throughout living areas, stone kitchen benchtops, SMEG appliances, floor-to-ceiling bathroom tiling and ducted air conditioning.

Residents will have access to a rooftop recreation level featuring a swimming pool, sauna, barbecue facilities and landscaped relaxation areas, complemented by additional communal space at ground level. Many apartments enjoy uninterrupted views across Lane Cove National Park, reinforcing the project's connection to its natural setting.

[smartcode_project:default project_id=134951 project_image_fid=364551]

<a href="https://www.apartments.com.au/developers/urban-property-group">Urban Property Group</a>, a family-owned developer and builder with nearly four decades of experience, holds a 4.5-star iCIRT rating and was Australia's first developer to introduce 10-Year Latent Defects Insurance (LDI). La Vera is the first apartment development in <a href="https://www.apartments.com.au/developments/macquarie-park-nsw-2113">Macquarie Park</a> approved to offer the additional insurance protection, alongside a five-year warranty on SMEG appliances.

Urban Property Group CEO Patrick Elias said the additional protection reflects changing buyer expectations in the off the plan market.

"Consumers are a lot more weary and a lot more concerned in buying off the plan than they ever have been. Having LDI is a tool to portray the confidence that we have in our product, and a confidence we want buyers to share," Elias said.

Following completion of the building later this year, buyers will move into their apartments well before Christmas.

[smartcode_project_cta:default project_id=134951]

La Vera closes in on completion as Macquarie Park continues residential transformation

Brisbane developer Red &amp; Co's decision to include dual key apartments in its debut Gold Coast apartment development, <a href="https://www.apartments.com.au/new-apartments/como-varsity-lakes-22-lake-street-varsity-lakes-qld-4227">COMO Varsity Lakes</a>, is proving to be one of the project's biggest drawcards, with buyers quickly snapping up the flexible residences.

More than half of the project's 36 dual key apartments have already sold, helping drive COMO beyond the 50 per cent sold mark within the first month of launch.

The strong response highlights growing demand for apartment designs that can adapt to changing lifestyles, with buyers increasingly looking for homes that accommodate multi-generational living, provide rental income opportunities or simply offer greater flexibility over time.

Located on the shores of Lake Orr, COMO will deliver 156 apartments across 16 levels, with the dual-key residences forming a limited release within the broader development.

Each combines a primary two-bedroom apartment with a fully self-contained studio on a single title, connected by a shared foyer and lockable internal door. The design allows owners to house ageing parents, adult children or guests while maintaining privacy, or lease the secondary residence to generate additional income.

Just 17 of the original 36 dual key apartments remain available.

[smartcode_project:default project_id=135546 project_image_fid=367096]

The innovative configuration combines two fully self-contained residences on a single title, typically comprising a primary two-bedroom apartment alongside a separate studio residence, connected via a shared foyer and lockable internal door.&nbsp;

The model is proving particularly attractive to owner occupiers navigating changing family dynamics and the realities of the current housing crisis.&nbsp;

[smartcode_project:default project_id=135546 project_image_fid=363511]

<a href="https://www.apartments.com.au/project-marketer/npa">NPA</a>&nbsp;CEO Andrew Erwin said dual key living was resonating strongly with modern buyers because it delivered both financial flexibility and practical lifestyle benefits.&nbsp;

“The housing crisis and rising cost of living are fundamentally changing how Australians think about home ownership,” Erwin said.&nbsp;

“Dual key apartments provide a genuine solution for families who want to stay connected while maintaining independence. Parents can help adult children save for a future home, ageing parents can remain nearby without moving into aged care, and owners still retain privacy and flexibility.

“Importantly, buyers are also recognising the financial advantages. It creates the opportunity to generate additional income from part of the home without the holding costs associated with owning a separate investment property.”&nbsp;

[smartcode_project:default project_id=135546 project_image_fid=363509]

Unlike traditional dual occupancy arrangements, the residences operate under a single title, meaning owners only incur one set of body corporate fees, council rates and holding costs.&nbsp;

The secondary residence can also evolve over time - functioning as guest accommodation, a home office, creative studio or private retreat before later becoming an income-producing asset.

<a href="https://www.apartments.com.au/developers/red-co">Red &amp; Co</a>&nbsp;Director and Co-Founder David Laverty said the strong early sales reflected growing buyer urgency and changing priorities within the market.&nbsp;

“Securing more than half of COMO’s residences within such a short timeframe is an outstanding result and a clear endorsement of both the design and location,” Laverty said.&nbsp;

“Buyers are responding to the combination of location, connectivity and amenity, but ultimately it’s value relative to other East Coast markets that is driving enquiry.”&nbsp;

“We’re also seeing strong interest from owner occupiers looking for homes that can adapt with them over time. Flexibility has become one of the most important considerations for buyers in today’s market.”&nbsp;

[smartcode_project:default project_id=135546 project_image_fid=363515]

Designed by <a href="https://www.apartments.com.au/architects/bda-architecture">BDA Architecture</a>, COMO features a mix of one-, two- and three-bedroom residences with 2.7-metre ceilings and larger-format floorplans aimed at owner occupiers, downsizers and lifestyle-focused buyers.&nbsp;

The development will feature an extensive rooftop recreation and wellness offering including a 25-metre lap pool, sundeck, barbecue and dining areas, gym, sauna, plunge baths, landscaped gardens, wellness spaces and rooftop pickleball and paddleball courts.

The remaining dual key apartments range from 137 sqm to 167 sqm and include generous three-bedroom layouts with separate self-contained studio accommodation and dual parking.&nbsp;

Erwin said the dual key concept represented a broader shift in how Australians would live in the future.

“People want homes that can evolve with their lives,” he said.&nbsp;

“A dual key apartment can suit a family today, support an ageing parent tomorrow, and potentially generate income later on. That adaptability is becoming incredibly valuable in the current environment.”

Prices currently range from $2,115,750 to $2,583,000.&nbsp;

[smartcode_project_cta:default project_id=135546]

Inter-generational living drives demand for COMO’s dual key apartments as housing pressures reshape buyer priorities 

Builder-developer&nbsp;<a href="https://www.apartments.com.au/developers/ceerose">Ceerose</a> has doubled down on its Leichhardt ambitions, lodging its second State Significant Development Application (SSDA) in the suburb in the last six months.

Their newest proposal seeks to transform a former industrial precinct into a new residential community centred around the adaptive reuse of one of the site's heritage warehouse buildings.

The new project, on a 6,930 sqm block at&nbsp;<a href="https://www.apartments.com.au/new-apartments/40-76-william-street-leichhardt-nsw-2040">40–76 William Street</a>, will bring more than 200 apartments to a suburb that has seen little to no new supply in recent years. It follows Ceerose's late 2025 SSDA for a mixed-use apartment project on nearby Parramatta Road, signalling the developer's growing investment in Sydney's Inner West.

Ceerose Founder Edward Doueihi told Apartments.com.au the developer’s long-standing presence in Leichhardt and the Inner West had given it a strong understanding of how the area has evolved and where its future opportunities lie.

“Ceerose has had a long-standing presence in Leichhardt and the Inner West, giving us a unique understanding of the area’s evolution and future potential,” Doueihi said.

“Having delivered projects throughout the region, we have witnessed the suburb’s transformation first-hand and understand the opportunities for its continued growth.”

Doueihi said that understanding also informed the planning process, with a comprehensive Stakeholder Engagement Outcomes Report prepared before the application was lodged.

The report identified the key issues and concerns raised by neighbouring residents and other stakeholders, allowing those matters to be considered and incorporated into the design where appropriate.

He said the delivery of additional housing would also play an important role in supporting the revitalisation of Norton Street and the Italian Forum.

“By increasing the local residential population, the development is expected to strengthen demand for local businesses, encourage further investment, and help restore the vibrancy that made the precinct a thriving destination in the early 2000s.”

<img alt="First look: Ceerose returns to Leichhardt with 203-apartment adaptive reuse proposal at former warehouse site" data-entity-type="file" data-entity-uuid="7258c54c-8167-479e-8361-2d5fca9915b4" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Appendix%2010B%20-%20CGI%20-%20View%202.jpg?VersionId=S9DQfxu_jpcB5LrAEYFUbyMzg5odW6i5" />

Designed by <a href="https://www.apartments.com.au/architects/woods-bagot">Woods Bagot</a>, the redevelopment would involve the demolition of four existing industrial buildings while retaining and adaptively reusing the site's most significant warehouse. The retained structure would anchor a new residential precinct comprising five interconnected buildings arranged around a large central landscaped courtyard, with heights stepping from five storeys along the surrounding residential streets to 11 storeys at the William Street corner.

According to the Architecture Design Report by Woods Bagot, the proposal "seeks to create a residential village centred around a generous green heart while celebrating the site's industrial heritage through the adaptive reuse of the existing warehouse building."

The development would comprise 203 apartments, with 188 proposed as build-to-sell residences, alongside 15 affordable housing apartments.

Rather than treating the retained warehouse as a standalone heritage object, Woods Bagot has sought to weave the site's industrial history throughout the masterplan. The proposal retains the north and west facades of the landmark corner warehouse, while new buildings reinterpret the site's brick-and-steel industrial language through their material palette and architectural expression.

<img alt="First look: Ceerose returns to Leichhardt with 203-apartment adaptive reuse proposal at former warehouse site" data-entity-type="file" data-entity-uuid="9e8c64c2-881b-49e1-8c90-6b6acaaa45b6" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Appendix%2010C%20-%20CGI%20-%20View%203.jpg?VersionId=Qm8_8H_Xrg_sc4Mdjc59vlAcKF_5wRTb" />

The design is organised around what Woods Bagot describes as a "green heart", a landscaped communal open space that reinstates the leafy character removed when the site became an industrial storage facility. A new pedestrian laneway running through the site would improve permeability between William, North and Francis streets, linking residents through landscaped public spaces while activating the ground plane.

Residents would have access to communal gardens and shared recreation areas distributed throughout the development. Sustainability has also been prioritised, with the project targeting an average 7.9-star NatHERS rating. Proposed initiatives include rooftop solar generation, rainwater harvesting, passive solar design, naturally ventilated lobbies, extensive cross-ventilation and the reuse of existing building fabric to reduce embodied carbon.

The adaptive reuse strategy became a defining feature of the application after heritage investigations found only one of the site's industrial buildings could feasibly be retained. The Heritage Impact Statement concludes that preserving the key warehouse façades while referencing the site's industrial character throughout the new development provides an appropriate balance between renewal and conservation.

<img alt="First look: Ceerose returns to Leichhardt with 203-apartment adaptive reuse proposal at former warehouse site" data-entity-type="file" data-entity-uuid="efffafdb-594f-4e2b-a067-921fd51c05e1" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Appendix%2010D%20-%20CGI%20-%20View%204.jpg?VersionId=DPmE4.k16YRt0i27hEZVtJAffarpvUfx" />

"Retention and adaptation of the site buildings has been explored but found not to be feasible except for the tallest building, whose street facades will be retained," the heritage report states.

"The proposed building will interpret the brick and steel character of the subject site, including reuse of some components and construction of a large 'sawtooth' structure in the proposed open space."

<img alt="First look: Ceerose returns to Leichhardt with 203-apartment adaptive reuse proposal at former warehouse site" data-entity-type="file" data-entity-uuid="3bfef2b5-83f5-40cd-9cab-767092f34266" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Appendix%2010E%20-%20CGI%20-%20View%205.jpg?VersionId=7asb3i_ql4ybbuJOUb5UHBEIy0Q9t.DF" />

The William Street site is located around 300 metres from Leichhardt North Light Rail station and a short walk to Norton Street's retail, dining and hospitality precinct. The surrounding area has increasingly become a focus for urban renewal given its proximity to public transport and the Parramatta Road corridor.

Doueihi founded Ceerose in 1998 and has grown the business to become one of Sydney's more active apartment developers in recent years, with completed projects including The Alex Collective in Alexandria, Abbie's Lane in Annandale, and the award-winning Munro House in Elizabeth Bay. They are currently delivering Belgravia, 17 luxury apartments in Potts Point.

First look: Ceerose doubles down in Leichhardt with adaptive reuse of former warehouse site

Property 2019

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EXPERT OBSERVER
In the 2018 year, the number of dwelling approvals fell by 5.5 per cent to 210,772. The biggest decline was in Western Australia (down 16.9 per cent).
The biggest lift in approvals was in the ACT (up by 64.3 per cent).
NSW and Victoria dominate the list of regions with both the biggest gains and declines in approvals.
The approvals data has implications for banks, retailers, developers, building and building material companies.
<img src="https://www.urban.com.au/images/2019/2/14/CS%201.JPG" alt="">
What do the figures show and what does it all mean?
Australia is well past the peak of home building activity in the current cycle. In the year to August 2016, 242,779 approvals were granted by local governments to building new homes – the largest ever total for dwelling approvals in a 12- month period. In previous cycles, annual approval numbers had not passed 200,000 approvals.
In 2018, almost 211,000 approvals were granted to build new homes. This figure is still historically high. So while approvals have retreated from highs, there is still a lot of building being done and will be done over 2019.
The number of homes currently being built across Australia is only just below record highs.
The building cycle tends to start with council approval to build the new dwelling. Finance is secured around the same time. And the actual building phase can take over a year in the case of high-rise apartment developments or 6-12 months in the case of free-standing homes.
Different trades and businesses are impacted a different points of the business cycle. So knowledge of which regions are expanding at any point in time is important.
<img src="https://www.urban.com.au/images/2019/2/14/CS%202.JPG" alt="">
As pent-up demand for homes is met, the building cycle will change from new construction to renovation activity. That assumes that people are less inclined to move home when home prices are softening and rather choose to extend or enhance their current home.
The Hills Shire (NSW), the ACT and the Central Coast (NSW) were stand-out regions in 2018 in terms of building activity.
Encouraged by infrastructure developments, dwelling approvals in the Hills Shire largely doubled in 2018.
The Australian Bureau of Statistics (ABS) classifies around 570 local government areas (LGAs).
CommSec has ranked the LGAs by the number of dwelling approvals in 2018 and then sorted to find those big building regions with the fastest and slowest growth over 2018.
While home building work will remain firm in 2019 in regions like the Hills Shire in NSW, Logan in Queensland and Geelong in Victoria, capital city apartment construction is set to slow. Dwelling approvals in Sydney fell by 60 per cent in 2018 and fell by 37 per cent in Melbourne.
<img src="https://www.urban.com.au/images/2019/2/14/CS%203.JPG" alt="">
In 2018, there were 73 LGAs in Australia where there wasn’t one approval to build a new home. There were 173 regions with fewer than 10 homes approved for construction. The 30 regions with the largest number of dwelling approvals account for half of all new approvals in Australia. 
The big building regions in 2018 were Blacktown (NSW), Wyndham (Victoria), Brisbane City (Queensland), Port Adelaide-Enfield (South Australia), Swan (Western Australia), Clarence (Tasmania) and Palmerston (Northern Territory). 
What are the implications for interest rates and investors? 
Housing supply has responded to the lift in demand. In other words more homes have been built to meet the increasing demand for accommodation from firm population growth. With more supply or choice, buyers have greater negotiating power over vendors (individual owners and developers).
<img src="https://www.urban.com.au/images/2019/2/14/CS%206.JPG" alt="">
As a result, there is downward pressure on prices – especially prices that lifted to unsustainable levels in Sydney and Melbourne suburbs when demand was well in excess of supply. 
But interest rates remain low and the job market is healthy and these factors will act as fundamental supports for home prices. As is always the case, housing moves from periods of under-supply to over-supply. Over the coming year new apartment developments will be completed and some buyers may see the market value of their acquisition is below purchase price.
Buyers, lenders and developers will need to work through this ‘digestion’ process. 
Changing conditions in housing markets are being watched carefully by the Reserve Bank (RBA). Some investors may also need to adjust desired rents in order to attract tenants. First home buyers and budding tenants will be amongst the winners in the softening market conditions. 
<img src="https://www.urban.com.au/images/2019/2/14/CS%204.JPG" alt="">
The RBA noted in the Statement on Monetary Policy: ..”the number of building approvals has been trending lower for more than a year to be around its lowest level since 2013.
"Information from the Bank’s liaison program also points to a slowing in the earlier stages of residential development over the past year."
"In particular, demand for new, off-the-plan apartments in Sydney and Melbourne has declined, driven by weaker demand from domestic investors and foreign buyers. Greenfield land sales have also fallen over the past year. Many property developers cite tighter access to credit as a dampening factor.” 
<img src="https://www.urban.com.au/images/2019/2/14/CS%205.JPG" alt="">
In terms of prices &amp; rents the RBA said: “A large supply of new dwellings in some cities has also placed downward pressure on housing price growth and rents. In general, supply has been concentrated in cities where there has been relatively strong population growth, which should continue to support the underlying demand for new dwellings."
"In the rental market, the national vacancy rate is a little below average. This partly reflects the low vacancy rate in Melbourne as population growth continues to absorb the supply of new dwellings.
"In contrast, the vacancy rate in Sydney has risen, particularly in the middle-ring suburbs as new supply has come online; advertised rent inflation has declined. In other capital cities, rental vacancy rates have fallen and advertised rents have generally risen.”
<img src="https://www.urban.com.au/images/2019/2/14/CS%207.JPG" alt="">
The Reserve Bank recently changed interest rate policy from a tightening bias to a neutral stance.
One reason for the change was the “uncertainty” about how the changing housing conditions will affect consumer spending and employment. 
To date, builders, developers and lenders haven’t reported major issues with defaults or delinquencies from new developments.
Mirvac recently reported that it settled 1,067 residential lots in the six months to December and was on track to meet the target of 2,500 residential lot settlements in 2018/19.
Mirvac noted “Defaults in the period remained below 2 per cent.” AV Jennings noted a low level of unsold stock and didn’t note any major issues with settlements.
CommSec expects interest rates to be unchanged for the foreseeable future.
CRAIG JAMES is the Chief Economist of CommSec
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cjames-5S2v74qSNK

Dwelling approvals in Sydney fell 60 per cent in 2018: CommSec's Craig James

<html><body>
GUEST OBSERVER
The December 2018 housing finance figures released by the Australian Bureau of Statistics show the number of loans for housing continues to decline.
Overall the figures for December 2018 show, in trend terms the number of owner-occupied finance commitments decreased by 0.1 per cent – the fifteenth consecutive month of decreases.
If refinancing is excluded, in trend terms, the number of owner-occupied finance commitments decreased by 1.2 per cent –also the fifteenth consecutive month of decreases and the lowest since April 2013.
In trend terms decreases were recorded in Victoria, New South Wales and Queensland.
The largest decrease of 1.3 per cent was in Queensland. South Australia, Northern Territory and the Australian Capital Territory were unchanged. Western Australia and Tasmania had increases with the largest of 0.5 per cent in Tasmania.
The value of investment housing commitments decreased by 2.5 per cent in December, in trend terms, and is the lowest since 2012 and less than half of the April 2015 peak.
In trend terms, the number of established dwellings purchase commitments decreased by 1.2 per cent while the purchase of new dwellings decreased by 0.1 per cent and new dwelling construction fell by 1.2 per cent.
The proportion of first home buyers, as part of the total owner-occupied housing finance commitments decreased in December to 17.7 per cent from 18.3 per cent in November and the number of loans to first home buyers decreased by 18.8 per cent.
The continued decline in housing finance reflects the slowing market as well as the APRA restrictions on investors, which went too far for too long, the fallout from the Royal Commission into Banking and concerns about changes to property taxation and its impact should there be a change in Government.
There is a clear risk that the decline in activity in the residential property market will become a major drag on the economy. With the Government formulating its 2019 Budget and its response to the Hayne Royal Commission the contribution the property sector makes to the economy should be at the forefront of its considerations.
ADRIAN KELLY is the President of Real Estate Institute of Australia (pictured)
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j.ballantyne1990-6AQqhLzZaK

No bright spots in housing finance numbers: REIA's Adrian Kelly

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Villa World said while sales for the period HY19 were down, however property settlements for the period were generally consistent with the previous period.
Managing Director and CEO Craig Treasure (pictured) said, “The current challenging market conditions are part of the cyclical nature of the property industry."
"However, Villa World has a long history of successfully navigating through market cycles and has a forward strategy focused on helping people reach home and long-term value creation."
"We believe Villa World is well placed to capitalise on opportunities that will arise for astute acquisitions and partnering arrangements."
"In the current market conditions, we have invigorated our sales strategy to highlight our value product offering in our sector," he stated
The Company made a $17.6 million after tax HY19 profit, compared with $17.3 million for the same period last year.
Queensland flagship projects including The Meadows (Strathpine), Killara (Logan) and Arundel Springs (Gold Coast) "sold well"
Although Victoria's property market has moderated, some of Villa World’s Victorian projects have remained consistent, notably the Wollert joint venture project.
Villa World said as previously stated, delivery times on Victorian projects are taking longer than anticipated.
Several stages in the Company’s Victorian projects are scheduled for completion in late FY19, with some likely to extend into HY20.
They belive Market conditions and the availability of customer credit are likely to remain challenging for the remainder of FY19. Plus the upcoming federal and NSW elections may also lead to increased customer uncertainty.
GNet tangible assets at 31 December 2018 represented $2.31 per share.
Mr Treasure said, “the Company has conviction that its projects are located where people want to live, its homes are priced within reach of its customers, and its turnkey homes offer a unique customer experience."
"With sound financial fundamentals, prudent capital management and a committed team, the company has the foundations and resources to provide sustained success and shareholder value beyond the current sector dynamics," he concluded.
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Residential house and land developer Villa World sales down in HY19

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EXPERT OBSERVATION
Housing finance approvals posted a very weak finish to 2018 with sizeable declines across all components.
The headline number of owner occupier loans fell 6.1%, much weaker than the consensus forecast of a 2% decline. Ex-refi, the number of approvals were down a hefty 8.2% in the final month of 2018, to be off 14.4% for the year. Notably, what was initially an investor-led cycle is now seeing clear weakness in owner occupier activity – both the value and number of loans.
The value of investor loans also declined, a 4.8% fall taking this segment down 21.8% for the year. Note that survey changes mean this measure now excludes investor loans for ‘construction of dwellings for rent or resale’ and for ‘purchase of dwellings by others for rent or resale’ – components that previously accounted for around 15% of the value of investor approvals. Helpfully, the ABS also now provides an ‘ex refi’ measure for the value of investor loans, which dropped 4.6% in the month but is down more substantially by 27.8% over the year.
The combined total value of housing finance approvals including investors but excluding refi declined 5.9%mth to be down 19.8%yr.
Construction finance approvals fared a little better, recording a 2.4% decline but still down over 10% for the full year. Approvals for the purchase of newly built dwellings, including 'off the plan apartment sales' were down more sharply, –5.5%mth, –20.2%yr.
All major states recorded declines in the December month, the number of owner occupier approvals excl refi down 6.1% in NSW, 10.4% in Vic, 6% in Qld, 7% in WA and 3.4% in SA. The value of dwelling approvals including investor loans and excluding refi (estimates of which are now provided on a more timely basis) confirm the wide spread as well with large declines in NSW, Vic, Qld and WA, all down around 20%yr.
There were some notable details in the mix. First home buyer activity, a segment that has been supported by state government incentives, are also starting to show signs of slowing. However, the detail around average loan sizes suggests the biggest decline is coming in the 'upgrader' segment, suggesting changes to borrower assessments and perhaps the impact of lower prices on existing home equity may be impacting.
All up, the December finance approvals data shows a very weak finish to 2018 with weakness coming across the board, confirming the message from other market measures.
MATTHEW HASSAN is a senior economist at Westpac
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Australian housing finance had a broad-based fall late 2018: Matthew Hassan

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EXPERT OBSERVER
The Governor chose to repeat the statement’s concluding paragraph which explains the policy decision with the same words that he used in December despite lower forecasts and recognition of downside risks.
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As expected, the Board of the Reserve Bank decided to leave the cash rate unchanged at 1.5%. At the February meeting, the Board discusses the executive’s revised forecasts which will be released in the February Statement of Monetary Policy on February 8.
However, in recent statements, the Governor has provided readers with growth and inflation forecasts and this was repeated in today’s statement.
For 2019, forecast growth has been revised down from 3 ¼ per cent to 3 per cent, and 2020, from 3 per cent to “a little less” due to slower growth in exports of resources.
It is important that this 3 per cent growth forecast is above the assessed trend rate of 2 ¾ per cent, and the implied 2020 forecast is likely to be around trend.
If a central bank is forecasting above trend growth, then it is highly unlikely to adopt an easing bias, and indeed the chances are still likely that the Governor will persist with his assessment that even though rates are likely to remain steady for some time, the next move is likely to be up.
The inflation forecasts were also revised with the underlying inflation forecast for 2019 reduced from 2 ¼ per cent to 2 per cent, while the 2020 forecast remains at 2 ¼ per cent. Hence the Bank is maintaining the view that inflation will gradually move into the 2 to 3 per cent band, although it will take somewhat longer than previously expected.
There are good reasons why the Bank lowered its growth forecasts. Firstly, while it still assesses the outlook for global growth as “reasonable”, it recognises that “downside risks have increased”. Secondly, it has made some significant changes around the household sector and housing.
For some time, Westpac has argued that the fall in house prices in Sydney and Melbourne will be associated with a negative wealth effect.
In the RBA’s previous writings, they tended to dismiss any wealth effect, but in today’s statement the Governor notes “the main domestic uncertainty remains around the outlook for household spending and the effect of falling housing prices in some cities”.
In linking house prices with household spending, he appears to be recognising the risk of a negative wealth effect.
Westpac has also argued that residential housing construction will be a drag on growth in both 2019 and 2020. The RBA has not supported that view, referring to a strong pipeline. But, recent falls in dwelling approvals, including for detached housing, clearly point to a significant drag on growth from the housing construction downturn.
The statement continues to point to “rising business investment” which in the December statement was linked to “business conditions are positive”. The Governor has obviously decided that the strong negative signal from the recent NAB business survey was insufficient at this stage to review the business investment outlook.
Given that the survey was taken in early January, Westpac thinks that approach is reasonable but there will be considerable interest to see whether future surveys send a more positive signal.
The Governor maintains his positive rhetoric around the labour market and confirms its forecast that the unemployment rate will fall to 4 ¾ per cent by the end of 2020. He also expects a further lift in wages over time, supporting household incomes.
Financial conditions in the US attract some attention, although the recent sharp decline in equity prices is noted to have been partly reversed. He also observes that market participants no longer expect the FOMC to be tightening monetary policy.
The Sydney and Melbourne housing markets are assessed as “going through a period of adjustment”, and credit conditions have tightened.
This is the approach which he has taken in previous statements but it is very significant that he has begun to recognise a potential wealth effect, meaning that the price adjustment may have implications for the real economy.
With a more cautious view on the wealth effect and recognition that dwelling construction will contract, Westpac’s GDP forecast for 2019 and 2020 is 2.6%, with recent data releases pointing to downside risks even for those modest numbers.
Finally, the Governor chose to repeat the concluding paragraph which explains the policy decision with the same words that he used in December despite lower forecasts and recognition of downside risks.
Notably, it includes the sentence “Further progress in reducing unemployment and having inflation return to target is expected, although this progress is likely to be gradual.”
Conclusion
With these revised forecasts, the RBA is clearly less comfortable with its previous positive outlook. Its growth forecasts remain significantly above Westpac’s own view.
With our forecasts of 2.6% growth in 2019 and 2020, it still seems that the more likely outcome will be for steady rates, even if as we expect, the RBA will eventually have to adopt growth forecasts much closer to Westpac’s current view.
Westpac confirms its long-held forecast that the RBA cash rate will remain on hold in 2019 and 2020.
BILL EVANS is the Chief Economist for Westpac
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Reserve Bank lowers growth and inflation forecasts but remains confident: Bill Evans

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EXPERT OBSERVER
Housing weakness in late 2019 was clearly not confined to just turnover and prices with new dwelling approvals sliding sharply into year end – down 26% between Sep and Dec, the last month marking the lowest level for monthly approvals since June 2013. For Q4 as a whole, approvals were down 10.9%qtr and 23.7%yr.
Approvals are now signalling an unambiguous further weakening that will clearly see declining new dwelling investment detract from Australia’s growth in 2019. Westpac expects new dwelling investment to decline 8% in the year with a further 5% contraction in 2020.
The composition of the approvals decline points to downside risks to this outlook. Units continue to drive the cycle with a further 18.8% drop in Dec to be down 38%yr. Within this segment, ‘high rise’ approvals look to be down a further 16% in the month and by over a third in Q4 as a whole. That is outpacing our assumed path of a cumulative 40% decline by the end of 2019, suggesting weakness may be more pronounced and/or 'front loaded'.
More importantly, there continues to be significant weakness in other segments as well – medium density approvals down over 10% in the month and private detached house approvals down –2.2%mth, –11.3%yr. The shorter ‘lags’ on non high rise work means these declines will likely impact activity through the first three quarters of 2019.
The state breakdown shows weakness spread across the major eastern states: NSW –8.1%mth, –21%yr; and Vic –8.1%mth, –23%yr; and Qld –5.8%mth, –29.7%yr. WA posted a slight gain but is also down 30%yr.
The total value of renovation approvals rose 3.1% to be about flat on a year ago but with a modest uptrend in place. While the rise is mild, it is coming across all the major states.
The total value of non res building approvals fell 9.8% to be down about 15%yr. Latest monthly reads have been choppy around a flat trend, albeit with better gains for NSW and Vic and, by sector, for education-related building in the public sector.
Overall the December approvals update clearly challenges the RBA's view from the November Statement on Monetary Policy that "... dwelling investment is expected to decline gradually" and suggests that, as well as incorporating the weaker starting point from the Q3 national accounts, its revised forecasts to be released in Friday's February Statement on Monetary Policy will also need to materially lower the near term outlook for dwelling investment.
Even if the Reserve Bank maintains its view that the negative 'wealth effect' spillovers from falling house prices will be limited, there is a clear ‘real economy’ negative coming through via new dwelling investment.
MATTHEW HASSAN is a senior economist at Westpac
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A clear ‘real economy’ negative coming through via new dwelling investment: Matthew Hassan

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National residential listings only declined marginally by 0.03% in January 2019 to 328,089 from 328,203 in December 2018, according to figures released by SQM Research.
The figures show both Sydney and Melbourne were down 2.3%, whilst Canberra dropped 2%. 
However, all other capital cities had marginal increases in residential listings for January. Hobart recorded the largest increase at 1.4%.
Seasonally it is normal for large listing declines to be recorded in January as the property market goes into hibernation for the holiday period.
So SQM Research's Louis Christopher regards the minimal declines as a weak result for the market.
Compared to a year ago, national listings rose 8%, with Sydney, Melbourne and Canberra’s year-on-year listings increasing the most - Melbourne up 42.3%, Canberra 24.6% and Sydney 22.3%.
Year-on-year results for Hobart shows a yearly decline of 1.9%, with residential property listings dropping from 2,362 in January 2018 to 2,318 in January 2019. Darwin also experienced yearly declines of sale listings of 0.6%.
Louis Christopher, Managing Director of SQM Research said, “listings in January recorded a very minor decrease, with some cities actually recording increases."
"This is abnormal and concerning. It implies that vendors had a terrible spring selling season with most still trying to move their properties in January."
"Many have not been able to sell. We are now expecting a surge in listings over February,” he added.
<img src="https://www.urban.com.au/images/2019/2/5/SQM%20chart%201.JPG" alt="">
(Source: SQM Research)
SQM also found that capital city asking prices for units and houses declined by 0.4% and 2.2% respectively, for the month to 5 February 2019.
Unit asking prices are now $572,800 and houses $915,900.
The largest monthly decline was in Sydney, where house asking prices declined by 1.7% but did manage a modest 0.3% increase in house prices.
Hobart posted increases in both unit and house asking prices over the month, 1.7% and 0.1% respectively.
However, both unit and house asking prices declined in Brisbane and Melbourne over the month.
Darwin experienced a notable 5.5% increase in unit prices.
Year-on-year capital city asking prices also experienced declines of 2.6% for units and 6.2% for houses.
Year-on-year Hobart continued to show the strongest growth for both houses and units with a 4.0% increase in houses and 7.0% for units.
Canberra also experienced yearly growth with 2.7% increase in houses and 3.8% increase in units.
<img src="https://www.urban.com.au/images/2019/2/5/SQM%20Chart%202.JPG" alt="">
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Both national property listings and capital city asking prices declined in January: SQM

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Australian consumers are uncertain about the future of the property market, according to the latest consumer survey from NAB.
With Australian house prices continuing to moderate, home owners, investors, buyers and sellers now face a different and for some unfamiliar, property market.
This survey found <a href="/news/melbourne-houses-set-to-fall-the-most-in-2019-nab-survey">Melbourne houses are set to fall the most of any in 2019</a>.
<a href="https://www.propertyobserver.com.au/subscribe" target="_blank"><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/2019/1/1/Strip%20ad%20keep%20up%20in%202019.jpg" alt=""></a>
NAB’s Chief Economist, Alan Oster, said “most consumers think now is a good time to renovate their home or buy to live in, but with prices falling across most of the country, not surprisingly they don’t think it’s a good time to sell their home or investment property”.  
<a href="https://www.propertyobserver.com.au/images/2019/1/24/Is%20it%20a%20good%20time%20australia.JPG" target="_blank">Click</a> to enlarge.
<img src="https://www.urban.com.au/images/2019/1/24/Is%20it%20a%20good%20time%20australia.JPG" alt="">
Overall, 1 in 2 Australians said it wasn’t a good time to sell their home or investment property. A much higher number in Western Australia said it wasn’t a good time to sell their home.
“We suspect this is influenced by the fact that some home owners in WA may also be sitting on capital losses” said Mr. Oster.
Over the next 12 months Australians are still most positive about renovating their home and buying a property to live in. 
But Mr Oster said, “overwhelmingly, the majority plan to sit tight and do nothing."
On average, consumers expect price falls of ‐2.1% over the next 12 months compared to ‐2.4% forecast by property professionals that NAB surveyed.   
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Australians plan to sit tight and do nothing in the 2019 property market: NAB Survey

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The Perth rental market has continued its recovery in the December 2018 quarter, with the vacancy rate declining to 2.8 per cent, according to the latest data from REIWA.
REIWA President Damian Collins said “The last time the Perth vacancy rate was this low was in March 2013. The rapid improvement we’ve observed in the last 18 months is impressive, especially considering the vacancy rate peaked at 7.3 per cent in June 2017 – the highest it’s ever been."
“Now that the vacancy rate is below three per cent, we can safely say the market is in a recovery phase with landlords now the beneficiary of the current rental environment," Mr Collin said.
Median Rent Price
Perth’s overall median rent price continued to hold at $350 per week during the December quarter.
“The median rent in Perth has been stable for seven consecutive quarters, which is the longest stretch of stable rents Perth has seen since reiwa.com first started capturing rental data in 2001,” Mr Collins said.
Despite the markets overall stability 105 suburbs recorded an increase in price, with North Coogee, Churchlands, Ardross, Daglish and Munster the top performers, according to REIWA's findings.
Mr Collins said, “When we drill down further and isolate houses and units, the results of the December quarter are very pleasing for landlords, with both houses and units experiencing increases in rents. The median house rent increased $10 per week to $360 during the December quarter, while the median unit rent increased $5 per week to $325."
“This improvement didn’t translate into an increase in the overall median as there were more units leased during the quarter than houses, which has kept the overall median stable.”
“If the rental market continues on its current trajectory, we should see Perth’s overall median rent price increase in 2019, which will be a welcome development for landlords” Mr Collins stated.
Leasing activity
There were 12,917 properties leased in Perth during the December quarter.
“Leasing activity slowed during the December quarter, as the festive season saw less people out and about searching for properties. This is very common at this time of year, with activity tending to decline in December before increasing again early in the New Year,” Mr Collins said.
Reiwa.com data shows the five suburbs to experience the biggest increase in leasing activity (percentage wise) were Kallaroo, Daglish, Melville, Merriwa and Hilton, while the suburbs with the highest volume of leased properties were Perth, East Perth, Scarborough, Baldivis and Maylands.
“We expect to see a notable increase in leasing activity in 2019, with REIWA members already noticing a significant uptick in the volume of enquiries for rentals in January,” Mr Collins said.
Listings for rent
REIWA indicated there were 6,865 properties for rent in Perth at the end of the December quarter.
“Listings continue to reduce, with the December quarter figure down 10 per cent on the September quarter and a substantial 27 per cent on the same time last year,” Mr Collins said.
“The sharp decline in listings is a driving force behind why Perth’s vacancy rate has improved. With population growth in WA on the incline and fewer new-building projects commencing, listing stock is being absorbed more quickly.”
Average leasing time
Landlords found tenant's on average four days quicker in the December quarter than in the September quarter down to 44 days from 48.
“The signs for 2019 look very promising. The rapidly improving rental landscape combined with Perth’s favourable buying environment should hopefully see more investors enticed back to the market,” Mr Collins concluded.
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Perth vacancy rate drops to five year low: REIWA

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EXPERT OBSERVATION
Within a country of the size and breadth of Australia, where hundreds of marketplaces function independently and simultaneously, it’s no surprise that real estate is a dynamic industry.
The past 12 months have been no exception: Sydney and Melbourne, the largest metropolitan markets, have softened after prolonged growth; activity in regional markets has grown as buyers seek affordability; investor activity has slowed; the banks tightened lending criteria in the wake of the Hayne Royal Commission; and state legislators moved to give tenants more rights in their rental properties.
So, what’s around the corner in 2019?
1) Polling points to a change in government in 2019.
As constituents did in the Wentworth by-election, analysts believe the public will again queue up at polling booths to punish the Coalition for an unstable year of leadership. But, focusing on property, Labor is taking to the election the same negative gearing and capital gains tax policies it proposed at the 2016 election.
Labor wants to restrict negative gearing to new builds and halve the current capital gains tax discount on investment properties.
Over the last three years, opponents to the policy have said it will turn investors away from property, jeopardising the availability of rental stock and making tenants compete for remaining rentals.
Research undertaken by LJ Hooker has shown negative gearing is an important part of the public’s investment strategy with a poll of 1,700 landlords indicating 31% would sell some or part of their property portfolio if negative gearing was abolished or restricted.
Labor’s policy originated in 2015 at the height of property growth in Sydney and Melbourne, where property values grew around 15% and 10% respectively, over a 12-month period.
But over the past year, both cities have seen prices decline by -8% in Sydney and -5% in Melbourne.
Additionally, removing negative gearing creates less demand for real estate-based employment.
The real estate industry would require fewer strata and property managers and rental properties require regular maintenance to be compliant and a fall in demand would impact trades people, handymen and other service providers.
Interfering with how people choose to invest while the market is self-correcting will could pose a major challenge for the wider market in 2019.
2) FHBs march continues
After several frustrating years on the sidelines, First Home Buyers (FHBs) have been a good news story of 2018.
Data from the Australian Bureau of Statistics (ABS) show FHB activity rose 14.9% in the year to October.
Indeed, not since 2009 have more FHBs been involved in the marketplace.
FHBs came to the fore as tighter lending restrictions – a product of the Royal Commission into Banking, Superannuation and Financial Services Industries - made it difficult for investors to compete for the same sort of entry level stock.
Softening house prices in the major metropolitan markets provided the best levels of affordability for FHBs for several years.
The final Hayne Commission report will be handed down in February, with a Federal budget and election following soon after.
Lenders will no doubt be chastised in the final Report, as they were in the Interim volume.
We expect investors will continue to feel the immediate fall-out from the Report which - along with tightened residential yields – will make it harder for them to maintain real estate within their wealth strategy.
Consequently, FHBs will have less competition at auctions around the country enabling more to make the leap from renting to owning.
FHBs are an important part of the real estate ‘food chain’. When FHBs are active, they enable second, third and fourth home buyers to sell their homes and upgrade. Expect to see FHBs out in force again in 2019.
3) Global forces and regulators
Buyers and investors have become accustomed to the monthly Reserve Board of Australia (RBA) meeting passing with no fanfare; it’s been 28 months (August 2016) since the Board changed the official cash rate.
However, the Central Bank’s influence goes only so far with several of the Big Four lifting their variable rates independent of the RBA’s decision making since then.
Global forces – Brexit, the controversial Trump presidency and the ambitions of China – will cause economic reverberations around the world at the same time that Central Banks are increasing cash rates. These two things will combine to push up the costs of financing for banks which will, in turn, increase mortgage expenses.
The Hayne Royal Commission will also conclude and release recommendations which may also see lending criteria tighten and borrowers jump through more hoops to get a mortgage.
4) Users tap the digital marketplace
Technology plays a greater role in our lives every year. 
In 2019, LJ Hooker will overturn the communication channels between the industry and customers. LJ Hooker has released the LJ Hooker Vendor App.
The app is an industry-first product, allowing sellers a birds-eye perspective of the selling process in real time.
The LJ Hooker Vendor App provides sellers with immediate information on how many people attended their open home; the number of impressions their property received online; and even tips on how to best present their property for buyers.
2019 will be the year in which real estate sets a new benchmark in this space.
5) Regional radar
Despite a correction in prices, buyers will continue to look outside the capital cities for better value.
Proximity to Melbourne’s corporate hub, mixed with the coastal lifestyle and its own transition from a blue collar to white collar economy has underpinned Geelong’s fortunes, with the median house price increasing 16.6% to $579,000 over the past 12 months.
The introduction of new infrastructure to support the Commonwealth Games on the Gold Coast this year saw the median house price rise to $655,000 in November, up from $627,000 at the same time last year, according to CoreLogic (a 4% increase), while the Sunshine Coast median increased 7.7%.
Also, government polices encouraging people to relocate to regional centres will increase demand in these areas.
For instance, the Andrews Government’s first home buyer grants encourages renters to make the transition to ownership by building in a regional area with a $20,000 incentive.
In NSW, Premier Gladys Berejiklian has flagged incentivising students which are a part of the state’s $11 billion international education sector to head to universities outside Sydney.
Markets to watch in 2019 will also include the resources regions. In 2018, the mining state of WA posted its first net population growth figures for several years. It had an immediate impact on the rental market in Perth with the Real Estate Institute of Western (REIWA) reporting a 3.4% vacancy rate in the September quarter - the best performance for the state’s investors since March 2014.
Perth is a launchpad for Fly-In, Fly-Out workers in the iron ore hub of the Pilbara. The Pilbara’s median house price has increased 4.3% to October ($240,000). Whilst it has struggled since the mining boom (the median house price has dropped 69.2% over the last five years) the local employment opportunities bode well for a continued property recovery in 2019.
Central Queensland was likewise a former darling for property investors with areas like Moranbah and Dysart returning massive rental returns as mining propelled the Queensland economy. Production is starting up again and the wider Mackay market posted a 12.6% increase in its median house price to $310,000 this year.
Consequently, many regional markets will outperform their capital city counterparts over 2019.
Mathew Tiller is the head of research at LJ Hooker.
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