<p>Construction is now underway at <a href="https://www.apartments.com.au/new-townhouses/cumulus-grand-villas-carrara-17-baltimore-court-carrara-qld-4211">Cumulus Grand Villas</a> in Carrara, with all stages fully funded as <a href="https://www.apartments.com.au/developers/venturecrowd-property-projects">VentureCrowd</a> progresses its 59-residence gated community on an elevated ridgeline overlooking 100 hectares of natural savanna.</p>

<p>The commencement marks a key milestone for the Gold Coast project, designed by <a href="https://www.apartments.com.au/architects/bda-architecture">BDA Architecture</a> and being delivered by <a href="https://www.apartments.com.au/builders/devcon">Devcon Property Group</a>, at a time when buyers are placing greater emphasis on delivery certainty and builder track record.</p>

<p>With Devcon active in South East Queensland since 1993 and having delivered more than 1,000 homes, the team is positioning Cumulus as a fully financed, under-construction offering in a market where risk mitigation has become a central consideration for off-the-plan purchasers.</p>

<p>[smartcode_project:default project_id=135663 project_image_fid=360496]</p>

<p>Located at 17 Baltimore Court, Cumulus Grand Villas comprises 59 three- and four-bedroom villas across four collections, Skyline, Canopy, Savanna and Broadview. Pricing starts from $1,455,000, with completion of the first stage targeted for Q4 2026.</p>

<p>Across the four collections, each design represents an expansive and thoughtfully considered offering. The Broadview provides additional flexibility within its floorplan, incorporating a multipurpose room or optional additional bedroom, and is priced from $1,895,000.&nbsp;</p>

<p>Configured across two levels, the four-bedroom villas feature two master bedrooms with private ensuites, as well as a multipurpose room (MPR), supporting intergenerational living, guest accommodation, or the creation of a dedicated retreat space.&nbsp;</p>

<p>[smartcode_project:default project_id=135663 project_image_fid=360497]</p>

<p>The main living areas are positioned on the ground floor, while the bedrooms are located upstairs, a configuration that promotes both family separation and connected living. All villas include a second master suite on the ground floor, reinforcing the project’s focus on flexibility and long-term adaptability.</p>

<p>That adaptability was central to BDA Architecture’s design approach. The team sought to create a sophisticated, low-maintenance product that makes the most of the site’s elevation and outlook while responding to evolving household needs. Expansive glazing, open-plan interiors and private outdoor areas draw in natural light and frame views towards the savanna, hinterland and Broadbeach skyline.</p>

<p>[smartcode_project:default project_id=135663 project_image_fid=360470]</p>

<p>VentureCrowd Director of Property David Whitting said the project responds to a growing group of buyers reassessing what premium living on the Gold Coast looks like.</p>

<p>Flexible floorplans have proven particularly relevant for purchasers aged between 40 and 65, including next home buyers, downsizers and investors. The inclusion of dual master suites in the Broadview design, along with options for a downstairs MPR or guest bedroom, allows homes to adapt as family dynamics shift, whether accommodating older parents, adult children, or extended stays.</p>

<p>Across the community, villas are specified with European appliances and premium fixtures and fittings, alongside double garages and landscaped private areas. The gated enclave includes number plate recognition entry, reinforcing a focus on security and exclusivity.</p>

<p>[smartcode_project:default project_id=135663 project_image_fid=360474]</p>

<p>Lifestyle amenity is anchored by the Infinity Terrace, an elevated communal space incorporating a 20m heated pool, alfresco zones and barbecue facilities, designed as a shared retreat within the neighbourhood. A two-acre private nature reserve with walking trails and rehabilitated bushland further integrates the development with its savanna-edge setting, reflecting a broader masterplan initiative to restore native vegetation and habitat corridors.</p>

<p><a href="https://www.apartments.com.au/developments/carrara-qld-4211">Carrara</a>’s positioning continues to attract attention from prestige buyers seeking proximity to the coast without beachfront pricing. The suburb offers access to major retail centres including Pacific Fair and Robina Town Centre, is around 15 minutes from Broadbeach, and benefits from connectivity via the M1 to Brisbane and the Gold Coast Airport.</p>

<p>[smartcode_project_cta:default project_id=135663]</p>


Joel Robinson

VentureCrowd’s Cumulus Grand Villas in Carrara advances with construction underway

<p>Joint venture partners <a href="https://www.apartments.com.au/developers/abadeen">Abadeen</a> and <a href="https://www.apartments.com.au/developers/perifa">PERIFA</a> are officially launching the third and final residential stage at their landmark $350 million harbourfront precinct, Putney Wharf, with The Residences representing the final opportunity to secure a new home within this rare waterfront destination.</p>

<p>Strong demand has already been established across the earlier stages of <a href="https://www.apartments.com.au/new-apartments/putney-wharf-residences-20-waterview-street-putney-nsw-2112">Putney Wharf</a>, with more than 50 per cent sold ahead of this final release. The Residences will introduce a selection of the precinct’s most premium apartments, many of which were deliberately reserved for this concluding stage.</p>

<p>Located at 20 Waterview Street, <a href="https://www.apartments.com.au/developments/putney-nsw-2112">Putney</a> NSW, the completed precinct will comprise 67 residences, including 18 terraces and 49 apartments, alongside five retail tenancies and a 36-berth marina.</p>

<p>[smartcode_project:default project_id=13962 project_image_fid=1338]</p>

<p>Developed alongside partners Phoenix Property Investors and Mitsubishi Estate Asia, Putney Wharf occupies a prized 300-metre stretch of absolute waterfront and incorporates the historic former Halvorsen’s Boatshed. The precinct connects directly to surrounding parklands via a landscaped foreshore walkway and a large, landscaped podium linking both sides of the development to the adjoining foreshore parklands.</p>

<p>The Residences comprise two newly built, three-storey apartment buildings delivering a boutique collection of 30 generously proportioned waterfront apartments. Designed to capture harbour outlooks, natural light and cooling breezes, The Residences balance architectural refinement with relaxed, low-maintenance living.</p>

<p>Architecturally designed by <a href="https://www.apartments.com.au/architects/sjb-architects">SJB</a>, the apartments continue the cohesive design language seen across the broader precinct. A refined palette of light and dark materials, softer-toned stone and neutral, earthy finishes reflect the surrounding landscape and harbour setting. Interiors feature painted timber veneers, tactile joinery, timber flooring to living spaces and 100 per cent natural wool carpets in bedrooms, creating warm and sophisticated homes.</p>

<p>[smartcode_project:default project_id=13962 project_image_fid=362525]</p>

<p>Justin Brown, Executive Chairman and Founder of Abadeen, said the release of the final residential stage marks an important milestone for the project.</p>

<p>“Putney Wharf brings together everything we’ve learned over more than 25 years of development,” Mr Brown said. “It respects the site’s extraordinary maritime history while delivering contemporary homes that connect people directly to the harbour.</p>

<p>The Residences offer the rare combination of low-maintenance apartment living, waterfront outlooks with beautiful sunset views, and the convenience of retail and amenity at your doorstep. For boating enthusiasts, the opportunity to secure a private marina berth completes a truly unique Sydney harbourfront lifestyle.”</p>

<p>[smartcode_project:default project_id=13962 project_image_fid=291197]</p>

<p>PERIFA Managing Director and Co-Founder Fabrizio Perilli added that the diversity of housing across the precinct has been central to the project’s success.</p>

<p>“Whether it’s the heritage Halvorsen’s apartments, the Waterview Terraces or now The Residences, Putney Wharf offers a range of homes that respond to different lifestyles, all united by an unrivalled harbourfront setting,” Perilli said. “This is a precinct that will add lasting value to the Putney community.”</p>

<p>Managing project marketing and sales, <a href="https://www.apartments.com.au/project-marketer/srm-residential">SRM Residential</a> Partner Tim Rees said the final release has already attracted strong demand reflecting the project’s unique harbourfront position and the success of earlier stages.</p>

<p>“Following the strong response to both the Halvorsen’s Boatshed residences and the Waterview Terraces, The Residences represent the final chance to secure a new home within this tightly held waterfront precinct,” Rees said. “Buyers are drawn to the rare combination of absolute harbour frontage, parkside living and genuine architectural quality.”</p>

<p>[smartcode_project:default project_id=13962 project_image_fid=362240]</p>

<p>Putney Wharf is a one-of-a-kind mixed-use destination, delivering an exclusive residential offering alongside waterfront dining, retail and a 36-berth marina designed to the latest Australian Standards, accommodating vessels up to 18 metres and helping address Sydney Harbour’s ongoing marina shortage.</p>

<p>The precinct will include five retail tenancies and a prominent waterfront jetty area fronting the retail village, creating an activated harbourfront destination for residents and visitors alike.</p>

<p>Residents will enjoy direct access to lush harbourfront parklands, a public foreshore walkway and landscaped podium gardens connecting the development to the surrounding waterfront reserve. Construction across the Putney Wharf precinct is expected to be completed by Q2 2027.</p>

<p>Sales of The Residences officially launch this weekend, with the display suite open Saturday and Sunday from 10am to 12pm at Putney Wharf. Visitors are invited to enjoy a complimentary coffee while touring The Residences and experiencing the Putney Wharf lifestyle firsthand.</p>

<p>[smartcode_project_cta:default project_id=13962]</p>


Final Harbourfront release in Putney Wharf launches this weekend

<p><a href="https://www.apartments.com.au/developers/draycon">Draycon Building</a> is nearing completion of Boutique Chevron Island, a 42-apartment development on the northern end of Chevron Island at 17–19 Parneno Street, with a limited-time offer of fully furnished apartments available.</p>

<p>Now more than 90 per cent complete, <a href="https://www.apartments.com.au/buildings/boutique-chevron-island-17-19-parneno-chevron-island-qld-4217">Boutique</a> has been shaped by one of the Gold Coast’s most tightly held island addresses, where riverfront outlooks and walkable access to Surfers Paradise converge.</p>

<p>For Draycon Building Managing Director Howard Dabit, the appeal of the site was immediate.</p>

<p>“I knew it was a good site as soon as I saw it,” Dabit said.</p>

<p>“The position and location on the north end of <a href="https://www.apartments.com.au/developments/chevron-island-qld-4217">Chevron Island</a>, the way the river swirls around the site basically from the north to the east, it feels like the site is surrounded by the water. The height that we’ve got and the aspect looking north is beautiful. Eighty per cent of the apartments are looking north so they get that drenching sunlight coming in.”</p>

<p>[smartcode_project:default project_id=89709 project_image_fid=360922]</p>

<p>That northern orientation places the development within a stretch of Chevron Island defined by open river aspects and skyline views, while remaining embedded in the suburb’s established village setting.</p>

<p>Chevron Island has increasingly drawn owner-occupiers seeking centrality without the intensity of high-rise beachfront living. Positioned at the geographical centre of the Gold Coast, the island offers direct access to both the beach and key cultural infrastructure while retaining a neighbourhood-scale character.</p>

<p>Connected by bridge to Surfers Paradise, Chevron Island offers walkable access to beaches, riverfront parklands and a revitalised foreshore boulevard animated by walkers and cyclists throughout the day. The Pacific Ocean is only minutes away, reinforcing the suburb’s dual river-and-surf identity.</p>

<p>At the same time, Thomas Drive forms the spine of the island’s village life, delivering cafés, wine bars, casual dining and everyday services within easy reach. Independent grocers, wellness operators and neighbourhood retailers contribute to a community atmosphere that remains distinct from the vertical scale of the beachfront.</p>

<p>[smartcode_project:default project_id=89709 project_image_fid=360915]</p>

<p>In the opposite direction, the Green Bridge links directly to HOTA – Home of the Arts – placing galleries, performance venues and parklands within walking distance. Weekly markets and major exhibitions draw visitors from across the region, while residents return to a quieter residential pocket at day’s end.</p>

<p>Public transport, including nearby bus routes and the G:link light rail corridor along the coastal spine, strengthens connectivity north and south. Griffith University, the Gold Coast University Hospital precinct and established private schools such as The Southport School are all within a short drive.</p>

<p>Ongoing investment across Surfers Paradise, HOTA and the broader Southport corridor has elevated amenity while preserving Chevron Island’s comparatively low-rise residential character. It is this balance, walkable village atmosphere paired with metropolitan-scale infrastructure, that continues to differentiate the suburb from higher-density beachfront precincts.</p>

<p>Boutique comprises just 42 residences, designed to maximise river and skyline outlooks within this tightly held island setting.</p>

<p>Boutique Chevron Island is slated for completion in April 2026, with prices starting from $1,220,000.</p>

<p>[smartcode_project_cta:default project_id=89709]</p>


Draycon Building’s Boutique Chevron Island places 42 residences at the heart of the Gold Coast

<p>Sydney developer <a href="https://www.apartments.com.au/developers/deicorp">Deicorp</a> has secured planning approval for a $300 million residential development in Lindfield, marking the company’s second project on Sydney’s North Shore and its first on the Upper North Shore.</p>

<p>Located on Beaconsfield Parade and designed by DKO Architecture, the state significant development comprises three buildings of up to 10 storeys and will include 399 residences, including 59 affordable homes and 40 adaptable homes.</p>

<p>Residences will range in size from one, two and three bedrooms, with two-bedroom apartments accounting for over 60 per cent of the product make-up. Residents will have access to a broad suite of amenities, including a wellness area, indoor and outdoor recreational spaces, a pool, a gym, a community room and a golf simulator.</p>

<p>In line with Deicorp’s long-standing focus on creating transit-oriented communities, the project is located just 260 metres from the Lindfield Train Station, reinforcing its role in delivering well-connected housing close to established infrastructure, retail and local services.</p>

<p>The inclusion of affordable and adaptable housing supports greater diversity within the local market, while the mix of apartment types responds to demand from downsizers, young professionals and families seeking access to the Upper North Shore.</p>

<p>Deicorp Founder Fouad Deiri OAM said the approval represents an important milestone for both the company and the suburb</p>

<p>“This approval allows us to deliver well-designed homes in a location that is already supported by strong transport and community infrastructure," Deiri said.</p>

<p>"Our focus is on creating places that integrate into their surroundings and provide long-term value for residents, and the broader Lindfield community. Being within walking distance of the station ensures this project supports sustainable growth in the right locations."</p>

<p>Across its portfolio, Deicorp currently has 4,703 apartments under construction, playing a leading role in shaping connected, liveable communities across Sydney.</p>

<p>Its expanding portfolio of Metro-linked developments includes Tallawong Village, <a href="https://www.apartments.com.au/new-apartments/kings-bay-village-five-dock-53-75-queens-road-five-dock-nsw-2046">Kings Bay Village</a> in Five Dock, <a href="https://www.apartments.com.au/new-apartments/hyde-metropolitan-sydney-133-141-liverpool-street-sydney-nsw-2000">Hyde Metropolitan</a> in Sydney CBD, <a href="https://www.apartments.com.au/new-apartments/falcon-alexander-crows-nest-8-alexander-street-crows-nest-nsw-2065">Falcon &amp; Alexander</a> in Crows Nest and Showground Village, Castle Hill.</p>

<p>Deicorp purchased the Beaconsfield Paradise site last year. Construction is scheduled to commence in Q2 of 2026 and will be completed in 2029.</p>


Deicorp expands portfolio to nearly 5,000 apartments with Lindfield project

<p>In a joint venture with The Trump Organization, Australia developer Altus Property Group has announced plans to bring a Trump International Hotel &amp; Tower to the Gold Coast, marking the first Trump-branded project in Australia.</p>

<p>"Trump International Hotel &amp; Tower, Gold Coast is our first official project in Australia and reflects our unwavering commitment to delivering world-class luxury experiences in iconic locations around the world," Eric Trump, Executive Vice President of The Trump Organization, said.</p>

<p>"This development exemplifies the Trump brand’s dedication to quality, sophistication, and unmatched service, and we are thrilled to bring this vision to the vibrant Gold Coast community."</p>

<p>The 91-storey building, which will become the tallest in Australia at 335 metres, will feature a&nbsp;285-room luxury hotel bearing the trademark Trump logo. It will also include 272 luxury residential apartments, a three-level podium with an exclusive Beach Club, and over 3,400 sqm of premium commercial, retail, and dining space, revitalizing the central Surfers Paradise precinct.</p>

<p>“Trump International Hotel &amp; Tower, Gold Coast will be a truly unique offering in the Australian market, bringing the prestige and allure of a world-class luxury brand,"&nbsp;Altus founder and chief executive David Young said.</p>

<p>"Altus Property Group is proud of its track record in delivering landmark developments across Australia, and our expertise ensures this project will be an outstanding success."</p>


Trump Hotel heads for the Gold Coast to become Australia's tallest building

Property Correction

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<div id="post-body-2934597644349298689" class="post-body entry-content">
<div class="separator">Some years ago there were doomsday predictions of a property correction in Australia since dwelling prices had reached three times the value of our Gross Domestic Product (the exact relevance of the three times figure was never adequately explained).</div>
<div class="separator"> </div>
<div class="separator">Today, the ratio is just over 3.6 times, having ticked down slightly over the past six months of publicly available official figures.</div>
<div class="separator"> </div>
<div class="separator">Is there a link between the two measures? Kind of, but it's not very strong.</div>
<div class="separator"> </div>
<div class="separator">In fact, as a predictor of property prices the ratio has been useless in recent years. Actually, no, it's been worse than useless - it has been a contra-indicator!</div>
<div class="separator"> </div>
<div class="separator">One problem with GDP is that it's historic in nature, so at best it tells you what was happening in the economy months ago - thus as an indicator of future outcomes it's necessarily all that useful.</div>
<div class="separator"> </div>
<div class="separator">More pertinently this ratio doesn't make a lot of logical sense since it compares a <strong>stock</strong> value at a fixed point in time with a <strong>flow</strong>, being the value of goods and services produced over a specified period of time (in the example in the chart below, one year).   </div>
<div class="separator"> </div>
<div class="separator"><a href="/images/2016/07/06/STOCK.jpg" target="_blank">Click to enlarge</a></div>
<div class="separator"><img src="/images/2016/07/06/STOCK.jpg" alt=""></div>
<br><div>Furthermore, some types of property in thinner markets fare much better in times of boom, and worse in times of bust. And some types of property in some inner suburban locations tend to outperform the averages over time, while properties is lower demand generally fail to keep pace with the averages.</div>
<div> </div>
<div class="separator"><strong><span style="text-decoration: underline;">Key national accounts aggregates</span></strong></div>
<div class="separator"> </div>
<div class="separator">In today's electronically connected world, hordes have wanted to be the person to 'call' the next Australian recession. But the economy has proved to be surprisingly robust, with the annualised rate of GDP growth for the past six months accelerating to 3.6 per cent. </div>
<div class="separator"> </div>
<div class="separator">The riposte has been that GDP is the "wrong" measure - we should ignore GDP and look at national income. </div>
<div class="separator"> </div>
<div class="separator">It is indeed true that real (i.e. adjusted for inflation) gross national income has stalled, but then again Australia's commodity prices could not and did not grow to the sky, so this isn't necessarily that surprising. </div>
<div class="separator"> </div>
<div class="separator">Another way to look at this is that national income has more than doubled over the past twenty years, even after accounting for inflation.</div>
<div class="separator"> </div>
<div class="separator"><a href="/images/2016/07/06/GDP.jpg" target="_blank">Click to enlarge</a></div>
<div class="separator"> </div>
<div class="separator"><img src="/images/2016/07/06/GDP.jpg" alt=""></div>
<div class="separator"> </div>
<div class="separator">Moreover, if GDP is an unreliable measure of the performance of the economy, how can it be a good measure of dwelling prices? Can't have it both ways! </div>
<div class="separator"> </div>
<div class="separator"><strong><span style="text-decoration: underline;">National accounts</span></strong></div>
<div class="separator"> </div>
<div class="separator">The national accounts provide us with a range of figures relating to the property markets, but as implied by the name of the data release the figures are national and backward-looking in nature, and therefore don't really tell us much of interest about what sub-regional property markets are up to or will be up to.</div>
<div class="separator"> </div>
<div class="separator">As noted, the national accounts lag a bit, but broadly home owners owe about $1 trillion in mortgage debt, and investors about $550 billion. What is not so well shown by these figures is that mortgage buffers and offset accounts are also at record high levels. </div>
<div class="separator"> </div>
<div class="separator"><a href="/images/2016/07/06/DEBT1.jpg" target="_blank">Click to enlarge</a></div>
<div class="separator"><img src="/images/2016/07/06/DEBT1.jpg" alt=""></div>
<br><div>With dwelling price growth having outpaced the growth in household debt, gearing ratios have declined in recent years.</div>
<br><div class="separator"><a href="/images/2016/07/06/DEBT2.jpg" target="_blank">Click to enlarge</a></div>
<div class="separator"><img src="/images/2016/07/06/DEBT2.jpg" alt=""></div>
<br><div class="separator">None of which tells of much of any predictive value. We can all think of housing markets in Australia that are overvalued; but equally we can all name others where prices are getting walloped or have already crashed. </div>
<div class="separator"> </div>
<div class="separator">If there is one ratio from the national accounts which is useful in predicting where to next for dwelling prices - and I'm not saying that there necessarily is - it's the ratio of housing interest payable to income. </div>
<div class="separator"> </div>
<div class="separator">The actual quoted percentage figure is skewed lower since so many households have no mortgage debt at all, but has declined from a peak of 16.4 per cent in June 2008 to 9.7 per cent by December 2015. </div>
<div class="separator"> </div>
<div class="separator">On this measure, mortgage repayments are more than 40 per cent cheaper than they were at their 2008 peak.</div>
<br><div class="separator"><a href="/images/2016/07/06/INTEREST%20PAYABLE.jpg" target="_blank">Click to enlarge</a></div>
<div class="separator"><img src="/images/2016/07/06/INTEREST%20PAYABLE.jpg" alt=""></div>
<div class="separator"> </div>
<div class="separator"><strong><span style="text-decoration: underline;">Rates heading lower?</span></strong></div>
<div class="separator"> </div>
<div class="separator">It would be fair to say that if mortgage rates head back to where they were at their most recent peak of about 8 to 9 per cent, then many of Australia's housing markets are heading into correction territory. </div>
<div class="separator"> </div>
<div class="separator">It's an interesting bet if you want to take it on. But money markets are begging to differ, with yields grinding out new lows in anticipation of possible Brexit turmoil. </div>
<div class="separator"> </div>
<div class="separator">Yesterday Australia's 10 year government bond yield fell to its lowest ever level at well below 2 per cent.</div>
<br><div class="separator"><a href="/images/2016/07/06/RBA.jpg" target="_blank">Click to enlarge</a></div>
<div class="separator"><img src="/images/2016/07/06/RBA.jpg" alt=""></div>
<br><div>Meanwhile, OIS rates are on a seek and destroy mission to crunch out new record lows, and they are winning that particular battle. We are now just one benign inflation print from seeing a new record low cash rate in August.</div>
<br><a href="/images/2016/07/06/OIS.jpg" target="_blank">Click to enlarge</a>
</div>
<div class="post-body entry-content">
<img src="/images/2016/07/06/OIS.jpg" alt=""><br><br><strong><span style="text-decoration: underline;">The wrap</span></strong><br><br><div>GDP is a useful measure of the strength or otherwise of the economy. And over the long term stronger economic growth may be reflected in higher dwelling prices - but not necessarily so, since there are so many other contributory factors, such as tax settings or the supply of new dwellings, for example. </div>
<div> </div>
<div>It's true that property prices can fall during recessions. But then again they can fall when GDP is positive such as they did in 2011 and early 2012.<br><br>And what about China, where real GDP growth has slowed from above 13 per cent in 2007 to just 6.7 per cent (if you can call 6.7 per cent slow), yet house prices in Shenzhen have skyrocketed by more than 50 per cent within the past year?<br><br>Obviously there are many other factors at play than purely economic growth.  And if there is a correlation between GDP and dwelling stock valuations, it's a tenuous one. </div>
<div> </div>
</div>
<div class="post-footer"> 
<p><span><em>PETE WARGENT is the co-founder of <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blogger</a>.</em><br></span></p>
<p><em>His latest book is <a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank" rel="nofollow">Four Green Houses and a Red Hotel</a>.</em></p>
</div>
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pwargent-M4siyDbqQY

The GDP myth and doomsday property predictions: Pete Wargent

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<p>The Australian states' mid-year reviews (MYRs) revealed that revenue pressures from the housing market correction will partly offset gains from the GST funding reform, according to Moody's Investors Service.</p>
<p>Moody's Investors Service noted that at the same time, they expect higher-than-budgeted capital spending to become a major challenge for states as most embark on record capital spending programs, causing debt to rise more rapidly than revenue.</p>
<p>They added that for some states, debt will start rising from a lower level than in earlier budget projections, overall debt burdens will remain elevated over the next four years, increasing vulnerability to risks such as unbudgeted health and education reform costs.</p>
<p><strong>Housing correction will partly erode revenue gains from GST reform:</strong></p>
<p>Additional Commonwealth GST top-up payments will be offset by a weaker housing market according to Moody's</p>
<p>However, a weaker housing market will offset these gains.</p>
<p>John Manning, Vice President, Moody’s Investors Service said, "following strong growth in transfer duty revenue in recent years, particularly driven by very strong house prices along the Australian east coast, the MYRs forecast a larger drop in property-related revenue than previously budgeted."</p>
<p>"Despite already projecting lower property-related revenue in their FY2019 budgets, the larger states of NSW and Victoria now forecast further declines in transfer duty and land tax revenue as a result of weakening residential property market prices and falling sales volumes."</p>
<p>He noted however, "revenue projections for both states increased overall."</p>
<p>"Both NSW and Victoria expect to receive additional Commonwealth grant revenue to offset lower transfer duty revenue."</p>
<p>"Higher payroll tax revenue, mineral royalties and an upward revision to GST also increased NSW’s revenue projections, while Victoria’s projections improved due to higher payroll taxes from stronger full-time employment and wage growth," he concluded.</p>
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j.ballantyne1990-6AQqhLzZaK

New South Wales and Victoria feeling the pressure from housing correction: Moody's

<html><body>
<p>Australia’s property market isn't going to crash, according to the Commonwealth Bank economist Gareth Aird.</p>
<p>Nor even a hard landing, but something not too dissimilar to the corrections of 2010 and 1989, he said.</p>
<p>But he has forecast that house prices in Sydney and Melbourne will continue declining until the end of next year.</p>
<p>“We (CBA) see the peak to trough being around 10% in Sydney and a little less in Melbourne (8.8%)," he told Business Insider.</p>
<p>Click <a href="https://edge.alluremedia.com.au/uploads/businessinsider/2018/09/CBA1.jpg" target="_blank">here</a> to enlarge</p>
<div>
<img src="https://edge.alluremedia.com.au/uploads/businessinsider/2018/09/CBA1.jpg" alt="">Source: <small>Commonwealth Bank</small>
</div>
<p>Aird’s model is calculated as a function of the four variables listed below.</p>
<p>1. Annual changes in mortgage rates (1 year advanced);</p>
<p>2. The annual change in the flow of credit (six months advanced);</p>
<p>3. Auction clearance rates (four months advanced);</p>
<p>and 4. The house price expectations index from the Westpac/Melbourne Insitute consumer sentiment survey (2 months advanced).</p>
<p>He concedes that “predicting property prices can look foolish retrospectively”.</p>
<p>However, the chart below shows that the four leading indicators outlined above track actual movements in house prices “very well”.</p>
<div>
<img src="https://edge.alluremedia.com.au/uploads/businessinsider/2018/09/CBA2.jpg" alt="">Source: <small>Commonwealth Bank</small>
</div>
<p>“Clearly, we can’t forecast auction clearance rates or the household perception around the future path of dwelling prices.”</p>
<p>CBA’s base case is that Sydney home prices will decline by 5% annually in 2018 — a relatively mild assessment given the latest weekly data from CoreLogic Sydney house prices are currently 5.9% lower than this time last year.</p>
<p>That would take overall declines from Sydney’s July 2017 peak to around 7.5%.</p>
<p>“For Melbourne, prices would be down by around 5% from their November 2017 peak,” Aird said.</p>
<p>“Nationally, we think prices will end the year down by around 3% with a roughly similar outcome likely in 2019."</p>
<p>Aird noted the broader economy outside of housing is still performing well, along with the continued strength in Australia’s labour market.</p>
<p>He expects the unemployment rate will decline further which lowers the risk of mortgage defaults.</p>
<p>There’s Australian rate of population growth, he added.</p>
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CBA's Gareth Aird forecasts 10 percent decline in Sydney house prices into 2019

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<p>McGrath founder and real estate veteran John McGrath has said he was misquoted in a report that the Sydney market was 40% overvalued.</p>
<p>“The Sydney market is most of the way thought its sales cycle and very near the top of its cycle.</p>
<p>"My view is there is no bubble, and no chance of a 40% correction,” clarified McGrath. </p>
<p>He had been misquoted saying he thought the Sydney market was 40 per cent overvalued, comments first published by Mortgage Business website, repeated on the Smart Property Investment site and then picked up by Business Insider, prompting a denial by John McGrath.</p>
<p>At the same time - and in the same article - he'd advised he thought there might be a <span> “small correction while the market catches its breath.”</span></p>
<p>The real estate expert had been attending the mortgage broker AussieThink conference on Monday on the Gold Coast where he sat on a panel with Aussie John Symond and banker Ian Narev, hosted by 2GB's Ross Greenwood.</p>
<p>He noted that there are “two housing markets” in Australia, and according to him the one that incorporated the two major cities of Sydney and Melbourne was at the end of its cycle.</p>
<p>“There are two markets in Australia, the Sydney/Melbourne market being one and the rest of Australia, and that could be broken into regionals and other capitals. If you look at the last 10 years, we have seen Sydney/Melbourne [prices] have doubled and we’ve seen most of the other capital cities increase by 10–20 per cent, so it really is a big separation of the two markets,” McGrath was quoted as saying by the Mortgage Business.</p>
<p>The report quoted him as saying that the two cities were “at least 95 per cent through their current cycle”, adding that “it could be 100 per cent in Sydney”.</p>
<p>“I don’t see any material capital growth in the next few years and, equally confidently, I don’t see any material drop either. I’ve been through five cycles and each time the market does see significant growth over a two- to three-year period."</p>
<p>“Yes Sydney is overvalued compared to other areas of Australia, however it is a world class international city and a major financial centre. I’ve long said that South East Queensland is undervalued and shows great growth potential,” said McGrath in a media release clarifying his remarks. </p>
<p>He said the market had strong drivers including deep demand, population growth, overseas investment and low interest rates but there was a possibility of a small and short correction of a few percent, and “I believe that is healthy for the sustainability of the market”.</p>
<p>His firm's profit fell 42 percent for the year ended June 30 and the company announced a share buyback to support its sliding share price.</p>
<p>The Australian Financial Review's Street Talk column has written private equity firms are "circling" the company.</p>
<div>
<p>It advised Anchorage Capital, Adamantem Capital, Advent Partners and Crescent Capital Partners are among firms reputedly having run the numbers on McGrath.</p>
<p>Street Talk was not suggesting any approach has been made to the board, or that talks are under way ahead of a formal end to an escrow period - for about 46.3 per cent of total issued capital - on September 8. </p>
</div>
<div>More than half of these shares are held by founder John McGrath, who retains the biggest shareholding with a 27 per cent stake.</div>
<div> </div>
<div>"Once the escrow period ends as much as 20 per cent of the register could change hands, should founding agents and others opt to sell," the AFR suggested.</div>
<div>
<p>McGrath is speculated as potentially proceeding with a privatisation of the the nation's third-largest real estate sale business.</p>
</div>
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