<a href="https://www.apartments.com.au/developers/consolidated-properties">Consolidated Properties Group</a> (CPG) is approaching the launch of its latest Brisbane riverfront development, Castile, on the dress circle Skyring Terrace in Newstead.

VIP buyers are now being engaged, with a full public sales launch coming later this year.

Positioned as the final opportunity to secure a new absolute riverfront residence on the East bank of Newstead, Teneriffe or New Farm, Castile at 47 Skyring Terrace has been designed by <a href="https://www.apartments.com.au/architects/woods-bagot">Woods Bagot</a> as a timeless addition to the Brisbane skyline.&nbsp;

[smartcode_project:default project_id=150489 project_image_fid=371113]

The name Castile draws on themes of permanence, sophistication and legacy, reflecting a broader vision centred on enduring architecture and timelessness in the rarest of riverfront positions.&nbsp;

CPG Chairman and CEO Don O’Rorke said the project had been envisioned as a future Brisbane icon.&nbsp;

“With 47 metres of direct river frontage and never to be built out views, 47 Skyring Terrace is the definitive address on the Brisbane River,” O’Rorke said.&nbsp;

[smartcode_project:default project_id=150489 project_image_fid=371114]

“Rather than following trend-based apartment design, Castile draws inspiration from Brisbane’s great heritage buildings, reinterpreting classical architecture into a contemporary riverfront landmark designed to stand proudly for the next 100 years,” he said.&nbsp;

The approved development will comprise 227 apartments across a 25-storey tower alongside a boutique six-storey riverfront building of just 12 residences.&nbsp;

Construction is scheduled to commence in September 2026.

[smartcode_project_cta:default project_id=150489]

Joel Robinson

CPG unveils Castile Newstead ahead of upcoming sales launch

Australia’s online shopping habits have shifted dramatically over the last decade. As eCommerce volumes surged, so too did the frustrations that came with traditional parcel delivery: missed deliveries, long Post Office queues, parcel theft and the challenge of being home during business hours.

Australia Post’s Parcel Lockers emerged as one of the more practical responses to that changing consumer behaviour.

What started as a relatively niche delivery option has evolved into a nationwide network of more than 1,400 self-service Parcel Lockers positioned at train stations, shopping centres, supermarkets and Post Offices across the country. The system allows Australians to send, collect and return parcels 24 hours a day, fundamentally changing how many people interact with deliveries.

The appeal is relatively straightforward: flexibility.

Instead of waiting at home for a delivery driver or rushing to a Post Office before closing time, users can direct eligible parcels to a Parcel Locker location of their choice. Once the parcel arrives, Australia Post sends a notification with a collection code or QR access through the AusPost app, allowing customers to retrieve their package at any time within the collection window.

For apartment residents in particular, the system has become increasingly valuable.

Higher-density living has created logistical challenges around deliveries, especially in buildings without concierge services or secure parcel rooms. Missed deliveries are common, while parcel theft has become an increasing concern as online shopping volumes continue to rise.

Australia Post itself has repeatedly highlighted the growing issue of “porch pirates” during peak shopping periods, encouraging customers to use Parcel Lockers as a safer alternative to unattended home deliveries.

That security aspect is one of the key reasons the Australia Post Parcel Locker network has grown so rapidly.

Parcel Lockers are positioned as secure, monitored collection points that reduce the risk of theft while also improving delivery efficiency for Australia Post. Instead of multiple redelivery attempts, parcels can be consolidated into a single secure destination.

The Parcel Lockers themselves are free to use through a MyPost account and support a range of parcel sizes up to 16 kilograms and dimensions of approximately 35 x 44 x 61 centimetres.

Beyond receiving parcels, the system has increasingly become integrated into the broader eCommerce ecosystem.

Customers can now use Parcel Lockers to return online purchases, while retailers have embraced the model as a way to improve delivery success rates and reduce friction in the shopping process. Australia Post has actively expanded partnerships with major retailers and promoted Parcel Lockers as part of a broader out-of-home strategy.

The timing of that expansion aligns with broader changes in Australian shopping behaviour.

The acceleration of online retail during and after the pandemic placed enormous pressure on delivery infrastructure. Parcel volumes reached record highs, particularly during Black Friday and Christmas periods, with Australia Post delivering more than 100 million parcels during peak festive seasons.

That growth forced logistics providers to rethink the “last mile” of delivery, widely regarded as the most expensive and operationally difficult stage of the process.

Parcel Locker systems have increasingly been viewed as part of the long-term solution.

The concept itself is not unique to Australia. Parcel Locker networks have become common globally, particularly across Europe and Asia, where dense urban environments and apartment living create similar logistical challenges. But Australia’s geography and suburban sprawl made adoption slower initially.

Now, however, the convenience factor is driving mainstream usage.

For commuters, Parcel Lockers near train stations allow parcels to be collected on the way home from work. For apartment dwellers, they remove the uncertainty around access and missed deliveries.

The rise of the AusPost app has also streamlined the experience, centralising notifications, tracking and Parcel Locker access into a single platform. Australia Post has increasingly pushed customers toward app-based delivery management, partly as a way to combat phishing scams and fake delivery notifications, which have become more sophisticated in recent years.

The Parcel Locker model is also beginning to influence property development itself.

Parcel management has become a growing consideration in apartment building design, particularly as online shopping becomes embedded in everyday life. Many new residential developments are now incorporating dedicated parcel rooms or Parcel Locker systems into foyers and communal spaces.

For developers, parcel management is increasingly viewed as part of the broader resident amenity offering, alongside gyms, wellness spaces and communal work areas.

That reflects a wider evolution in how residential buildings are designed.

Apartment buyers are placing greater emphasis on convenience, security and operational functionality, particularly in higher-density urban environments. Parcel delivery, once considered a minor operational detail, has become an increasingly important part of that equation.

Australia Post’s Parcel Locker network sits at the centre of that behavioural shift.

What began as a simple alternative delivery option has evolved into a key piece of infrastructure supporting Australia’s growing eCommerce economy and changing urban lifestyles.

And as online shopping continues to expand, the role of Parcel Lockers is likely to become even more embedded in how Australians live, shop and receive goods.

How Australia Post Parcel Lockers changed parcel delivery convenience in Australia

Perth’s new apartment market recorded its strongest quarter of sales since Q4 2021, with 412 apartments sold in Q1 2026 and a record quarterly sold value of $537 million, according to Urbis’ latest Apartment Essentials results.

Urbis said the March quarter result reflects strong, highly product‑specific demand across both ends of the market, from more attainable projects delivering at scale, through to premium stock being absorbed by equity‑rich downsizers.&nbsp;

David Cresp, Partner at Urbis, said the key story in Perth is not demand, it is the market’s ability to convert demand into delivered housing.&nbsp;

“This is the strongest sales quarter since Q4 2021, and it reinforces that demand in Perth is real and it’s local,” David Cresp said. “But the task now is delivery, turning that demand into projects that can actually be built and completed.”&nbsp;

[smartcode_project:default project_id=110291 project_image_fid=302785]

<h2>Affordable product leads, premium demand remains resilient</h2>

Sales in Q1 were led by more affordable projects, with The Boulevard (SKS Group) recording 115 sales in the quarter, the presentation noting this is only the second time a single project has surpassed 100 quarterly sales. The project was able to offer more affordable housing product right next to a train station.&nbsp;

Palmyra West (Finbar) also delivered strong results with 28 sales in Q1, following 84 sales in Q4, with an average price of under $800,000, underscoring depth of demand for well‑located, attainable new stock.&nbsp;

At the premium end, Urbis said downsizer demand is continuing, with the results highlighting Romeo (Applecross, Finbar) recording 75 sales and reaching almost 50% sold in one quarter.

Jual (Shenton Park, Celsius Property) also posted a strong quarter with 28 sales, reaching 39% sold in one quarter.

Urbis noted that Perth apartment demand is not speculative, not investor‑led, and not uniform, describing it as localised, often equity‑driven and highly product‑specific, a pattern reflected in the polarisation between strong “attainable” performers and premium downsizer product.&nbsp;

[smartcode_project:default project_id=148957 project_image_fid=364102]

<h2>Prices underpinned by costs, and the delivery risk is growing</h2>

Urbis said pricing pressure is cost not demand‑driven: construction costs and delivery risk are now a central constraint, with the results noting build costs remain elevated and volatile, and that energy, fuel and labour uncertainty weigh on feasibility.

David Cresp said a growing challenge for private Build‑to‑Sell developers is simply securing a builder in the current environment.

“Developers are really feeling the pressure from a building market that was operating at capacity and securing a builder is challenging,” David Cresp said, adding that even where a builder can be secured, “trying to get to the price that makes the development financially viable is incredibly challenging in the current market.”&nbsp;

Urbis’ broader WA commentary also notes that industry remains at or above capacity with lot and housing creation, and that many builders are limiting new sales to manage stretched workforces and fixed‑price contract pressures, conditions that flow directly into apartment feasibility and delivery timing.

[smartcode_project:default project_id=108869 project_image_fid=317905]

<h2>Supply: improving later, but still constrained, and Perth lags eastern benchmarks</h2>

While near‑term supply remains constrained, Urbis’ forecast shows completions lifting “Supply is forecast to be back above 1,500 apartments per annum for the first time since 2019”, with 1,775 completions forecast for 2026, and volumes remaining above that level over the following years.&nbsp;

Looking further ahead, completions are forecast to reach 2,500 in 2028, with the report noting 32% of that total is social/affordable, reflecting the role of government‑supported delivery in rebuilding the pipeline.&nbsp;

However, Urbis said Perth remains behind comparable markets on pipeline scale. In a national comparison of projects under construction, the report shows under construction Perth Build‑to‑Sell (BTS) at 3,446 apartments versus the Gold Coast at 7,922. Mr Cresp said “The challenge for Perth is how to we grow the delivery pipeline”.

Urbis’ conclusion is that Perth’s market is increasingly defined by product discipline and delivery certainty, with the research identifying “delivery certainty is key” and calling out builder risk and procurement models as core success factors, alongside “timing and staging”.&nbsp;

Perth apartment sales hit strongest pace since late 2021 as builder capacity tightens

<a href="https://www.apartments.com.au/developers/sammut-developments">Sammut Group</a> has secured development approval for its latest Brisbane apartment project, marking the Sydney developer’s next step in expanding its Queensland pipeline following the success of its debut Gold Coast development, Coast.

The approved project at <a href="https://www.apartments.com.au/new-apartments/44-glen-road-toowong-qld-4066">44 Glen Road, </a><a href="https://www.apartments.com.au/developments/toowong-qld-4066">Toowong</a> will deliver a 15-storey riverfront apartment building with 42 residences, significantly increasing the scale of the site’s previous approval for a smaller luxury scheme. Designed by Bureau^proberts, the development will comprise a mix of predominantly four-bedroom and two-bedroom apartments positioned to maximise Brisbane River and city views.

Sammut Director Julian Sammut said the group had been actively searching Brisbane for several years before identifying Toowong as the right fit.

“Brisbane was the right step for Sammut,” Sammut said.

“With the success of Coast we thought we should definitely look to do more in Queensland alone. We then pushed up to look at Brisbane. We've been looking for I'd say two to three years actually and it was hard to find the right location.”

<img alt="Sammut makes Brisbane apartment play" data-entity-type="" data-entity-uuid="" src="https://res.cloudinary.com/dz9xllyip/image/fetch/f_auto,c_limit,w_1440,q_75/https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/field/image/Screenshot%202025-12-23%20at%203.27.14%E2%80%AFPM.png?VersionId=dYAVIL7qdcGA8ojvkslSrLjczXFejSSx" />

Sammut said suburbs including New Farm and Teneriffe were considered before the group ultimately focused on Toowong due to its strong downsizer demographic and limited supply of developable riverfront land.

The site was acquired off-market after what Sammut described as a lengthy negotiation and planning process, with the developer pursuing an uplift to the original approval.

“We are DA approved now which is very exciting,” Sammut said.

“We've had our change approval come through and we've obviously doubled the height, 15 storeys plus rooftop. We've got 42 amazing apartments that are going to be coming to market soon.”

<img alt="Sammut makes Brisbane apartment play" data-entity-type="" data-entity-uuid="" src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,dpr_2.0,q_auto:good/https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202025-12-23%20at%203.27.26%E2%80%AFPM.png?VersionId=ohkRkY0dIZlqdfME2EZePsCQavRiBadE" />

Bureau^proberts said the design responds to Toowong’s evolving urban character, balancing contemporary apartment living with the area’s established residential identity.

“A place where traditional Queensland living has taken place for centuries; Toowong is seeing a shift of contemporary influence, commercial and retail hubs mixed with well-considered residential offerings – all the while maintaining its character and charm,” the architect noted in planning documents submitted to Brisbane City Council.

The architecture practice said the project’s form was shaped by its riverfront setting, flood considerations, neighbouring building scales, and view corridors.

“They said the mix of four and two-bedroom apartments capture the ‘fundamental qualities of Queenslander living,’ translated into the context of a contemporary subtropical building.”

The development sits just off Coronation Drive within walking distance of Toowong’s retail precinct and the upgraded Regatta ferry terminal, while also benefiting from proximity to the incoming green bridge connection to West End. Sammut said the accessibility and amenity offering were central to the site’s appeal.

The approval adds to growing residential activity along the Toowong riverfront, joining nearby projects including Consolidated Properties’ Monarch Residences and Spyre Group’s ARC Residences.

Sammut secures approval for debut Brisbane apartment development in Toowong

Developer Lanevick is heading back into Sydney’s apartment market after focusing more heavily on the luxury townhouse and terrace sector in recent years.

Lanevick, founded and directed by Steve Maroun, is expecting to receive approval in the coming months for a new apartment development in Gladesville, with the aim to launch it to the market later this year.

The 51-apartment project, designed by Studio Johnston, will comprise a mix of one-, two-, and three-bedroom apartments positioned toward the Hunters Hill downsizer market.

“Traditionally it’s been difficult for people in that market to downsize because there just hasn’t been the right product available,” Maroun said.

“We’re targeting buyers who might have 30 to 40 per cent of their house value sitting in the bank after downsizing.

“They still want good spacious entertaining areas, they still want quality design, but they also want flexibility and the ability to enjoy life a bit more after working hard for a long time.”

The project sits near Boronia Park and within close proximity to the Parramatta River foreshore, an area Maroun says offers more of a Hunters Hill lifestyle than a traditional apartment precinct.

“From a lifestyle perspective, it’s really more Hunters Hill than Gladesville,” Maroun said. “You’re close to the foreshore, close to parklands, and still connected back into the village precinct.”

From level four and above, apartments will capture water views&nbsp;toward Sydney Harbour. Communal amenity will include rooftop entertaining areas, wellness spaces, and a gym tailored toward owner-occupier buyers.

“We’ve really designed these apartments around that buyer coming from the Hunters Hill LGA and what they’re actually looking for in their next chapter.”

The proposed development has also been designed to respond to the changing character of the broader Gladesville town centre, where a growing number of mixed-use and residential proposals are expected to emerge over the coming years.

“Gladesville presented a rare opportunity to deliver a genuinely design-led residential project within an evolving lifestyle precinct, just moments from the growing Gladesville town centre, and we’ve approached the project with a strong focus on architecture, liveability and long-term community value,” Maroun said.

Maroun said Lanevick saw a first-mover advantage within the precinct as planning controls continue to evolve to accommodate greater housing density.

“We think there’s a real opportunity there that hasn’t really been serviced properly yet,” he said.

“There’s going to be a broader evolution of the whole Gladesville village precinct over time, particularly with more activation and mixed-use outcomes.”

The Venus Street proposal will include a commercial and retail component at ground level designed to contribute to that evolving streetscape activation.

“A big part of the thinking was how do you activate that area properly and create more vibrancy and amenity, which is what Hunters Hill has been looking for,” Maroun said.

Lanevick’s focus since 2020 has largely been on smaller-scale luxury townhouse and terrace developments. The developer recently completed Royale Randwick, also designed by Studio Johnston, where prices reached $3.65 million. The project was featured in the UDIA NSW 2026 Professional Development Prospectus and was also named a finalist for Development of the Year.

&nbsp;

Lanevick to cater for Hunters Hill downsizers with new Gladesville apartment development

Property 2019

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Short term weakness in 2019 house prices seems assured as the tight credit conditions and restrictive monetary policy settings constrain demand, according to economist Stephen Koukoulas.
"Nationwide prices may drop 5 per cent by the September quarter, with sharper falls likely in Sydney and Melbourne," he forecasts.
"Late 2019 will be the likely trough in house prices as easier monetary policy unfolds, there is a step up from previously frozen out first home buyers and the strength in demographic demand as fresh supply falters in line with the slippage in building approvals are all likely to put a floor under prices.
His call envisages a 5 per cent drop over first half of 2019 and then a 2 per cent rise in the second half.
"2020 might see a 3 per cent house price lift," he speculates.
<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="">
He recently wrote on <a href="https://au.finance.yahoo.com/news/dont-look-now-almost-certainly-poorer-year-ago-211934583" target="_blank">Yahoo Finance</a> that if you are a home owner in Sydney, Melbourne, Perth or Darwin and if you have a superannuation nest egg, the odds are you are less wealthy today than you were a year or two ago.
He noted the Australian stock market, where the bulk of superannuation assets are likely to be invested, had slumped 11 per cent since August, reducing the value of stocks by around $200 billion. 
"At the same time, home owners in Sydney, Melbourne, Perth and Darwin are seeing the value of their homes getting crunched.
"Here are some examples. 
"A house in Sydney that was $1 million in July 2017 is now worth around $890,000, a loss of $110,000 in 18 months.
"In Melbourne, a house that was $800,000 in early 2018 has lost around $50,000 in value, to now be worth around $750,000.
"In Perth, the situation is more parlous. Prices have dropped 15 per cent since late 2014, meaning that a property that was $600,000 in 2014-15 has lost close to $100,000 in value to be worth just over $500,000.
"Ouch!"
He suggests as the loss of wealth filters through to more and more householders, or perhaps when they see the house around the corner not sell for months and when if finally does, the price is a shock, consumers will likely scale back their spending, rebuild savings and be generally cautious in their approach to spending in 2019.
"This will undermine growth in the economy."
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j.ballantyne1990-6AQqhLzZaK

Stephen Koukoulas forecasts national house prices to begin small rise in late 2019

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EXPERT OBSERVER
2019 is likely to be an interesting year for the Australian economy.
Some of the big drags of recent years are receding but housing is turning down, uncertainty is high around the global outlook and it’s an election year, which will add to uncertainty.
Australian growth has slowed again September quarter GDP growth was just 0.3% quarter on quarter or 2.8% year on year and was well below expectations
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This was concerning for two reasons.
Firstly, it suggests that the pickup in growth seen in the first half of the year was an aberration.
And secondly it highlighted that the fears around consumer spending as housing slows may be starting to be realised as consumer spending was the big downside surprise.
Housing downturn… For years we have felt that the combination of surging household debt and surging house prices was Australia’s Achilles heel in that it posed the greatest domestic threat to Australian growth should it all unravel.
But we also felt that in the absence of a trigger it was hard to see it causing a major problem.
However, over the last year a combination of factors have come together to turn the housing cycle down and create a perfect storm for house prices in Sydney and Melbourne.
These include: poor affordability; tight credit conditions; a surge in the supply of units; a collapse in foreign demand; borrowers switching from interest only to principle and interest loans; fears by investors now that changes to negative gearing and capital gains tax if there is a change of government (assuming Labor can get it through the Senate) will reduce future demand for their property investment; all of this is seeing the positive feedback loop of recent years (of rising prices &gt; rising demand &gt; rising prices etc) give way to a negative feedback loop (of falling prices &gt; falling demand &gt; falling prices etc).
This could all be made worse if immigration levels are cut sharply.
Auction clearance rates have fallen to record lows – which for Sydney and Melbourne are consistent with further price falls running around 8-10% pa - and housing credit continues to slow.
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House prices in Sydney and Melbourne will likely have a top to bottom fall of around 20% (10% in 2019) and national average prices will likely have a top to bottom fall of around 10%.
While not on the scale of the property crashes seen during the Global Financial Crisis (GFC) in the US and parts of Europe, the Australian property downturn will have a significant negative economic impact.
The main impacts are expected to be:
1. A direct detraction from growth as the housing construction cycle turns down. This is likely to amount to around 0.4 percentage points per annum (which was what it added on average during the construction boom).
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2. Reduced demand for household equipment retail sales as dwelling completions top out and decline.
3. A negative wealth effect on consumer spending of around 1% pa. Rising housing wealth helped drive decent growth in consumer spending in NSW and Victoria as households reduced the amount they saved as their housing wealth rose. This is now likely to go in reverse detracting around 0.6 percentage points from GDP growth. 
4. There could also be a feedback loop into further bank credit tightening if non-performing loans and defaults rise.
Taken together these could detract 1-1.2 percentage points from growth over the next year.
Clearly a deeper slump in national property prices - say a 25% top to bottom fall rather than the 10% we are expecting - would cause severe economic damage but in the absence of much higher interest rates or unemployment causing mass defaults this is unlikely.
Australia hasn’t seen the sort of deterioration in lending standards seen in the US prior to the GFC that saw people with “no income, no job, no assets (NINJA’s)” get loans and where the Fed raised rates 17 times over two years! And unlike in the US, Australian mortgages are full recourse loans so there is no “jingle mail”.
So, a US GFC style surge in defaults adding to downwards pressure on prices is unlikely.
Barring a deeper property slump, a recession is unlikely.
The drag on growth from slumping mining investment (which was averaging around 1.5 percentage points per annum) is fading as mining investment is getting close to the bottom. 
Surveys point to a recovery in non-mining investment.
Business investment plans for this financial year are pointing to a 4% gain and 7% for non-mining investment.
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<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/2018/12/17/G4.jpg" alt="">
Public infrastructure spending is rising and has further to go.
Net exports are likely to continue adding to growth, although the US/China trade war is a threat here.
And there are even a couple of positives for consumer spending in the form of lower petrol prices (saving around $10 a week for a typical household) and likely pre-election tax cuts or handouts although these may not kick in until July 2019.
Under a Labor Government this looks likely to be more skewed to low and middle income earners with high income earners facing tax hikes.
Given the cross currents, our assessment is that growth is likely to be around 2.5-3% going forward.
This is not the recession some fear but it’s well down from the 3.5% pace the RBA expects.
Inflation to stay lower for longer Growth around 2.5-3% won’t be enough to further eat into spare labour market capacity so the decline in unemployment is likely to stall (job vacancies appear to be slowing) and underemployment is likely to remain high at 8.3%.
This in turn points to wages growth remaining weak.
Meanwhile, it’s hard to see much uptick in other sources of inflationary pressure.
Competition and pressure for price discounting remains intense and commodity prices have fallen this year with the oil price falling over 30% from its recent high feeding through to lower petrol prices and the link between moves in the $A and inflation has been weak for years now.
The latest Melbourne Institute Inflation Gauge points to a further fall in inflation into this quarter with its trimmed mean measure of underlying inflation up just 1.3% year on year in November.
Click here to enlarge.
<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/2018/12/17/G5.jpg" alt="">
Against the backdrop of falling house prices, tight credit conditions and constrained growth, which will keep wages growth weak and inflation below target for longer we see the next move by the RBA being a rate cut.
However, it will take a while to change the RBA’s thinking, so we don’t see rates being cut until second half next year but won’t rule out an earlier move if things are weaker earlier than we are expecting.
By end 2019 the cash rate is likely to have fallen to 1%.
Rate cuts won’t be aimed at reinflating the property market but supporting households with a mortgage to offset the negative wealth impact on spending.
A 0.25% rate cut roughly saves a household with a $400,000 mortgage $1000 a year in interest costs.
And banks will likely have no choice to pass the cuts on given the bad publicity not passing them on will generate.
There are several implications for Australian investors.
First, bank deposits rates will remain poor.
Second, with the RBA likely to cut rates and the Fed hiking (albeit slowing) the $A is likely to fall into the high $US0.60s.
Third, Australian bonds are likely to outperform global bonds.
Finally, while Australian shares are still great for income, global shares are likely to remain outperformers for capital growth. The housing downturn will weigh on retailers, retail property, banks and building material stocks. 
DR SHANE OLIVER is the Head of Investment Strategy and Chief Economist at AMP Capital
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soliver-smf6LQXgW9

The Australian economy in 2019 - house prices, growth and interest rates: Shane Oliver

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EXPERT OBSERVER
In 2019, there will be several political and economic factors that will continue to impact Sydney’s property market.
1.       Politics to have a major influence in 2019.
 The impending NSW state and federal elections in the first half of the year will heavily impact market conditions. If history teaches us anything, it is that when it comes to elections, people tend to sit on their hands.Uncertainty about changes in policy, such as Labor’s proposal to limit negative gearing tax breaks to new investments and halve the capital gains tax, will cause an extended period of stagnation. The Federal Government also has a difficult challenge in early 2019 to implement the recommendations from the banking royal commission. It is a genuine balancing act, as the Government needs to ensure future prudence, but also ensure that people are able to easily access credit.
2.       The rise and rise of first home buyers. 
It was not that long ago that first home buyers were sidelined in the property market and denounced by some commentators for their spending habits, despite the myriad economic and political forces at play that were locking them out. In 2018 the landscape has changed: financial stimulus was introduced to assist them, and simultaneously, macroprudential measures were introduced to limit investor activity, which has led to less competition and a subsequent correction in prices. First home buyers now account for approximately 25 per cent of all property purchases across our network, and with less investor activity, I fear the State Government may consider this job done. Any removal of concessions, however, would send the market into a spin, as many first home buyers would then not be able to afford to buy, and with less investors and less owner-occupiers, who is left to purchase property? All the pieces of the puzzle are currently in place for first home buyers, and it should stay that way in 2019.
3.       Bank valuations coming in under purchase price.
As property prices continue to fall, banks will become more prudent and low-ball buyers on valuations. We are already seeing many off-the-plan apartments that were bought 12-18 months ago now worth five to 10 per cent less than the original purchase price. Anyone who is struggling to secure lending should contest the valuation. It is possible to request a second opinion, or alternatively, provide extensive comparative evidence for similar properties that have sold in the area.
4.       Rates to stay unchanged in the first half of the year.
 The Reserve Bank of Australia has left interest rates unchanged for more than two years. Stagnant wage growth and a slowing market are keeping rates down, and it is unlikely we will see a change in the first half of 2019, which is good news for property owners. Beyond that, it is very difficult to say, as a few days in politics and economics is a long time, let alone a few months.
5.       People paying down mortgages more aggressively.
 While it may not be in the first half of next year, Australia’s record-low interest rates will change. It is advisable that homeowners pay down as much debt as they can while we have this advantageous environment. Accountants and banks will also be encouraging people to pay down debts before rates rise. Paying an additional $150 a month on a $600,000 loan could save a homeowner more than $10,000<a id="LPlnk175549" name="x__ftnref1" href="https://outlook.office.com/owa/?realm=student.uts.edu.au&amp;exsvurl=1&amp;ll-cc=1033&amp;modurl=0#x__ftn1">[1]</a> – and they will pay their debt down a year faster. I encourage anyone with disposable income to make a dent in their debt while they can.
6.       Fewer auctions with clearance rates of 50%. 
Fewer people will go to auction in 2019, as they fear the embarrassment of their property passing in. Auction clearance rates are likely to hover around 50 per cent next year. However, the instant nature of the reporting of auction clearance rates is not always an accurate market barometer. Sellers need to trust the auction process and know that several properties also sell before and after the actual auction day.
7.       Rental vacancies rates to rise. 
While historically house prices and rental performance have often been diametrically opposed, the current market does not really benefit either. While apartment development has been high over the last three to five years, half of these properties were snapped up by investors. With the market becoming more competitive, renters have more choice, and therefore, landlords need to be ultra-realistic with the prices they set. It may be tempting to try to wait for the right rental price, but investors need to listen to their agent’s advice next year, as holding out when there is no other interest could mean losing a month’s rent. Investors that have entered the market without a buffer may even be forced to sell in 2019 because they may not be able to balance the books.
DOUGLAS DRISCOLL is the Starr Partners CEO
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Landlords will need to be ultra-realistic with the rents they set: Douglas Driscoll's 2019 property forecast

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The spring auction selling season is over, with just three more Saturdays until the summer holiday hibernation.
There were three marked trends observed during the past three months with the property market going down like a wrought iron kite.
Firstly there was a drop in auction offerings as potential vendors decided it was not worth their while to list.
Secondly the Sydney clearance rate, which bounced around, weakened overall from 50 percent plus results to somewhere in the 40s.
Then was the inevitable accompanying price decline.
There were no real surprises in this emerging auction landscape.
The bidding over-exuberance that we all saw for an extended period in the sellers' market between 2012 and 2017 has almost completely disappeared, but there are still some red hot results.
The pendulum has swung to the other extreme of utmost buyer caution. 
We now have a buyer's market, except they can't all buy what they previously thought they could afford because the bank's knee-jerk reaction to the exposure of some reckless lending exposed by the banking royal commission.
I wrote recently that a couple with one child and a dual income of $120,000 could borrow $800,000 during the boom.
Fast forward and the same couple, now with a a little wage growth to a $129,000 combined salary and another child, can only borrow $680,000 because of stricter bank lending.
Their capacity to buy has gone backwards.
We are now actually four years into the attempts by the Australian Prudential Regulation Authority, to curb over zealous lending, which was turbo-charging price growth.
The banking regulator's initial measure was imposing a 10 per cent speed limit on the growth in lending to investors. The cap was scrapped in April with APRA saying it had served its purpose. The reaction had already come from investors who have stopped buying in droves given the expectations of lower prices makes housing less attractive.
APRA's next measure that reduced the occurrence of interest only (IO) loans is proving to be the real sleeper in why prices are down, and likely to stay down for some time.
The regulator wisely decided IO loans needed to be constrained to preserve overall financial stability.
Interest-only, along with the tax deduction of interest payments via negative gearing, certainly made financial sense for many investors.
But the banks were reckless in encouraging ordinary home buyers to ditch the conventional interest and principal loan.
There was a lot of upsizing to bigger pricier family homes that only happened after getting an interest only loan.
For a $750,000 home loan the monthly repayment of $4,174 fell to $3,325 if only the interest was being repaid for the first few years.
Now IO buyers, who amplified the housing price cycle, helping push prices up, have mostly gone.
And for the next few years exisiting interest only borrowers will likely need to get out before the loan automatically switches back to the higher rate, so there is an increased risk of continued price deflation.
Throw in the uncertainty over negative gearing policy and the property market is understandably going to be skittish as 2019 kicks off.
There's likely to be a further compounding of bank caution flowing from the February 1 final report of the banking royal commission. Then we have the NSW state election followed by the disruptive Federal poll.
We shall see a return to normal market conditions sometime.
This article was first published in the Saturday Telegraph
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