<p>The most elevated residential tower in Palm Beach, <a href="https://www.apartments.com.au/new-apartments/corallo-palm-beach-5-palm-beach-avenue-palm-beach-qld-4221">Corallo</a>, has officially launched this week, however only a handful of buyers will have an opportunity to buy in to the 17-storey project.</p>

<p>The $200 million mixed-use project includes ground floor dining and retail and is considered so valuable its developer, <a href="https://www.apartments.com.au/developers/changfa-group">Changfa Group</a>, will be staging its release of one-, two- and three-bedroom apartments and penthouses to the market.</p>

<p>[smartcode_project:default project_id=112194 project_image_fid=806]</p>

<p><a href="https://www.apartments.com.au/project-marketer/colliers">Colliers</a> International, Director, David Higgins, said the development’s location just metres from the beach on the corner of Palm Beach Avenue and the Gold Coast Highway influenced the sculptural design by the acclaimed Plus Architecture studio.</p>

<p>“<a href="https://www.apartments.com.au/developments/palm-beach-qld-4221">Palm Beach</a> locals understand the rare opportunity here at Corallo, particularly being the tallest building in the suburb and its proximity to the beach and local restaurants, and they’ve represented the bulk of pre-launch enquiries,” Higgins said.</p>

<p>“The orientation of the apartments captures views of the coastline from Surfers Paradise to Currumbin, and the diversity of floor plans and apartment types provide an exceptional level of choice.</p>

<p>“The first release includes just 59 one-, two and three-bedroom apartments and two half-floor penthouses, with flexible use designed to appeal to both owner-occupiers and investors."</p>

<p>&nbsp;</p>

<p>[smartcode_project:default project_id=112194 project_image_fid=799]</p>

<p>In addition to the ground floor amenity, residents will also have access to a private dedicated wellness level offering 734 sqm of resort-style amenities including a pool, cold plunge, wet deck, steam room, sauna, gym, day bed, fire pit, barbecue area, dining area and yoga/stretch deck.</p>

<p>The project is located within walking distance of Tallebudgera Creek, Burleigh Heads village, Currumbin Alley and Palm Beach Currumbin High School. The Gold Coast Airport is under 10 minutes away.</p>

<p>[smartcode_project:default project_id=112194 project_image_fid=814]</p>

<p>Higgins said Palm Beach remained a hotly contested suburb for home buyers, with prices doubling in the past five years.</p>

<p>“What makes Corallo so appealing to the local market is the diversity of apartment types and pricing, with one-bedroom apartments starting from $841,000 and two-bedroom apartments starting from $1.34 million,” he said.</p>

<p>“The ground floor retail and dining offering will further expand on Palm Beach’s village atmosphere and create a meeting place for locals, and those opportunities for connection are highly valued.”</p>

<p>&nbsp;</p>

<p>[smartcode_project:default project_id=112194 project_image_fid=807]</p>

<p>The on-site sales display, which includes a fully fitted kitchen, bathroom and bedroom, will be open until early works commence in Q1 2026. Each residence at Corallo will feature premium finishes including natural stone, artisanal brickwork, and warm copper accents.</p>

<p>Changfa Group has a two-decade history of delivering premium developments in Australia and internationally, having recently completed its collection of premium townhomes at Lyra, Hope Island, as well as apartment projects in Leichhardt, Carlingford, and Chatswood in New South Wales.</p>

<p>[smartcode_project_cta:default project_id=112194]</p>


Joel Robinson

$200 million Corallo Palm Beach launches with limited apartment release

<p>In a move that aligns with NSW's accelerated planning incentives for affordable housing, developer&nbsp;<a href="https://www.apartments.com.au/developers/the-one-collection">One Collection</a> has revised its Hills District apartment plans, and taken it to the NSW Government, to secure approval.</p>

<p>The developer, which is currently delivering Horizon Hurstville, is seeking to add 80 more apartments to its <a href="https://www.apartments.com.au/new-apartments/the-one-castle-hill-16-dawes-avenue-nsw-2154">Castle Hill development</a> near Castle Towers. They already have approval for 280 apartments across eight six-storey buildings.</p>

<p><img alt="One Collection" data-entity-type="file" data-entity-uuid="b3c298ba-1cc5-4db7-9872-607c75f8ceca" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202025-10-13%20at%2010.19.22%E2%80%AFAM.png?VersionId=wN9KpFIu5ENSGZLLsaZgXQHrXcwEO3Vd" /></p>

<p>Now on the desks of the NSW Department of Planning is 360 apartments, 48 of which will be dedicated to affordable housing.&nbsp;Affordable housing is to be “fully integrated within the building and visually indistinguishable,” according to the planning submission.</p>

<p>The 15,697 sqm block, an amalgamation of 16 sites, spans across Dawes Avenue, Hughes Avenue, and Camdan Crescent, sits 550m from Hills Showground Metro Station.&nbsp;</p>

<p>"The existing context is quickly changing from free-standing homes into residential flat buildings in line with the Hills Showground Precinct planning framework," Place Studio noted.</p>

<p><img alt="Castle Hill" data-entity-type="file" data-entity-uuid="3ec24948-c185-48fa-af8b-ed25adf302bf" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202025-10-13%20at%2010.19.04%E2%80%AFAM.png?VersionId=zNDX.IeRROX1RlDeYcS38xn8w_dqgU2t" /></p>

<p>They said the design was informed by the site's unique condition of having three street frontages and was developed to to respond sensitively to iots surrounding context.</p>

<p>"The design adopted a conventional perpendicular alignment to the primary street frontage. The massing of the development was carefully modulated to align with the evolving character of the neighbourhood. The design ensured that the scale was not excessive or out of context, but instead contributed to a cohesive urban form consistent with emerging developments in the area."</p>

<p><img alt="Castle Hill" data-entity-type="file" data-entity-uuid="f83ffdaa-f960-469d-b6fe-abcece57c9ef" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202025-10-13%20at%2010.19.09%E2%80%AFAM.png?VersionId=4oKlCyfaKes7jLi1_EMoqa46w2h_YvDZ" /></p>

<p>The apartment mix will be 46 one-beds, 168 two-bed apartments, and 146 three-bedroom units, with 631 parking spaces proposed.</p>

<p>Along the street frontages, the building heights are four storeys with a 7.5 metre setback, and eight storeys with an 11.5 metre setback. It should cost about $150 million to build.</p>

<p>One Collection works hand-in-hand with the respected development and construction firm Masscon, which has built a reputation for leveraging its expertise in the built environment to take on developments others can't. That's what they're achieving at Horizon Hurstville, having taken over the project to deliver it.</p>


First look: One Collection advances plans for Castle Hill apartments

<p>At Yarra’s Edge, <a href="https://www.apartments.com.au/developers/mirvac">Mirvac</a>’s newest tower under construction, <a href="https://www.apartments.com.au/new-apartments/trielle-at-yarra-s-edge-docklands-16-point-park-crescent-docklands-vic-3008">Trielle</a>, sets a new benchmark for elevated living. Rising 45 storeys, 12.5 metres from the Yarra River, the landmark building offers residents access to a private wellness retreat and spa, a resident-only golf simulator, and an elegant lounge, dining and bar complete with a self-playing piano, all without ever having to leave home.</p>

<p>Now, that sense of elevation has reached new heights with the Aerus Sub-Penthouses, a limited release of half-floor riverfront residences on the Collins St axis where the sought-after street meets the Yarra River.</p>

<p>Each Aerus Sub-Penthouse, located across levels 42 and 43, represents the most expansive offering within Trielle, aside from the yet-to-be-revealed crowning penthouses. Spanning between 269 and 301 sqm, these residences are designed to capture natural light and uninterrupted views of the city skyline, Yarra River, and Port Phillip Bay.</p>

<p>[smartcode_project:default project_id=114216 project_image_fid=3784]</p>

<p>Among the collection are three-bedroom sub penthouses, complemented by a media room, and expansive four-bedroom layouts. All include panoramic living areas and oversized master suites with luxury ensuites reminiscent of a five-star hotel, complemented by dedicated dressing rooms finished in timber and natural stone.</p>

<p>The interiors have been crafted by <a href="https://www.apartments.com.au/architects/mirvac-design">Mirvac Design</a>, the developer’s award-winning in-house architecture and design team. Every material has been chosen for quality and longevity, from sculpted stone island benches with feature soft wash LED lighting to bespoke joinery and chevron timber oak flooring.</p>

<p>Kitchens are fitted with a BORA induction cooktop with integrated downdraft extractor, alongside Gaggenau appliances, including a fridge, freezer, and wine fridge. The adjoining butler’s pantry incorporates the exclusive Gaggenau Minimalistic Series including oven, steam oven, microwave, coffee machine and warming drawer, all concealed behind handleless glass panels for a clean, integrated presentation. Bathrooms feature custom Apaisar freestanding baths and basins and natural stone benchtops, continuing Mirvac’s design emphasis on tactile, timeless materials.&nbsp;</p>

<p><img alt="Trielle at Yarra's Edge, Docklands" data-entity-type="file" data-entity-uuid="c00be724-b0f1-47c0-afed-54f829870704" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Aerus%20sub-penthouse.png?VersionId=Uktd61kpLSqNjwJeDFs7IaZ3xgLlDQmu" /></p>

<p>Michael Wiener, Design Director at Mirvac, says The Aerus Sub-Penthouse embodies the apex of Mirvac’s design ethos.</p>

<p>“Moving through your home is like walking on air - a private sanctuary where the craftsmanship is refined, the proportions generous, and the flow so effortless, you feel completely at ease in the sky,” Wiener says.</p>

<p>“In Aerus, we wanted to create a sense of weightlessness - a home that feels suspended in the skyline, full of light, grounded in luxury.”</p>

<p>[smartcode_project:default project_id=114216 project_image_fid=3777]</p>

<p>The Aerus Sub-Penthouses are expected to attract a mix of local and international buyers seeking a long-term residence of scale and quality in a riverfront setting, from returning expats to established families and business owners who value privacy, craftsmanship, and convenience within walking distance of the CBD.</p>

<p>With an unmatched suite of amenities, Trielle is the most extensively appointed development Mirvac has created to date at Yarra’s Edge. Within the tower will be The Oasis, a 900 sqm podium rooftop wellness retreat designed in collaboration with spa expert Naomi Gregory. Located seven storeys above the Yarra River promenade, it features a 25-metre lap pool, spa and sauna, hot magnesium spa, biophilic gym, yoga and Pilates studio, cold-pail contrast treatment, and day spa treatment rooms. Further amenities include a piano lounge, bookable dining room, cinema room, golf simulator studio, games room, teppanyaki bar, dog wash bay, and two flexible work hubs, The Biblioteca library and Mills Place office space, catering to residents’ evolving lifestyle needs.</p>

<p>Construction of the $350 million tower is underway through Mirvac’s in-house construction arm, with completion anticipated for mid-2027.</p>

<p>[smartcode_project_cta:default project_id=114216]</p>


Sky-high sanctuaries: Mirvac unveils The Aerus sub-penthouses at Trielle

<p><a href="https://www.apartments.com.au/developers/jwland-development">JWLand</a>’s De Burgh, the final residential release within the Northbourne Village precinct in Lyneham, is nearing completion just as the Federal Government’s Home Guarantee Scheme prepares for its most significant expansion to date.&nbsp;</p>

<p>From October 2025, the scheme will allow first home buyers to enter the market with just a five per cent deposit and no lenders mortgage insurance (LMI), removing some of the most common barriers to ownership.</p>

<p>With <a href="https://www.apartments.com.au/new-apartments/de-burgh-at-northbourne-village-40-de-burgh-street-lyneham-act-2602">De Burgh</a> on track for residents to move in by late spring 2025, the timing creates a strong opportunity for first home buyers seeking brand-new apartments in Canberra’s sought-after Inner North.&nbsp;</p>

<p>[smartcode_project:default project_id=139989 project_image_fid=212888]</p>

<p>The project delivers 350 residences across two buildings, with layouts ranging from compact studios through to one, two, and three-bedroom apartments.</p>

<p>JWLand has tailored the development for long-term liveability, integrating natural light, privacy and outdoor space into each home. Ground-floor residences feature private courtyards, while upper levels benefit from generous balconies.</p>

<p>Kitchens are fitted with Fisher &amp; Paykel appliances, and all apartments include ducted reverse-cycle air conditioning with smartphone app control for lighting and climate.&nbsp;</p>

<p>Shared resident facilities include a rooftop garden, gym, lounge and parcel lockers, alongside landscaped green space within the precinct.</p>

<p>[smartcode_project:default project_id=139989 project_image_fid=267376]</p>

<p>For buyers, the expanded Home Guarantee Scheme removes income caps and introduces unlimited places, making it more accessible than ever. With most De Burgh apartments priced under $1 million, they fall well within the updated eligibility thresholds.</p>

<p>The policy changes provide first home buyers with greater certainty and a smoother path to finance. Combined with the quality and location of De Burgh, the expanded scheme is expected to draw a new wave of buyers to Canberra’s Inner North.</p>

<p>Residents will benefit from the project’s central setting, just 600 metres from the light rail and three kilometres from Canberra’s CBD. The precinct is bordered by the <a href="https://www.apartments.com.au/developments/lyneham-act-2602">Lyneham</a> wetlands and sits within easy reach of cafes, restaurants, schools and the ANU.</p>

<p>With completion scheduled for late 2025, De Burgh is set to be among the first major apartment projects to meet the expanded scheme head-on, offering first-time buyers a realistic pathway to ownership in one of Canberra’s most connected neighbourhoods.</p>

<p>[smartcode_project_cta:default project_id=139989]</p>


JWLand’s De Burgh aligns with expanded Homebuyer Scheme, opening doors for first home buyers in Canberra’s Inner North

<p>A subtropical pair of residential towers are in planning for a key South Brisbane site neighbouring the iconic Expo ’88 Skyneedle, with new documents revealing a vertically layered vision designed to respond to the precinct’s evolving high-density character.</p>

<p>The proposal has been lodged by&nbsp;Darveniza Group, which is also is behind the 400-apartment Station Quarter precinct in Alderley.</p>

<p>Darveniza Group, led by Jane Darveniza, the Brisbane-based investor and Queensland rich-lister and widow of the late property magnate Bojan Darveniza, is seeking approval for a mixed-use project encompassing 204 apartments, ground-level retail, food and drink tenancies, and office space across two architecturally integrated towers at 37–39 Manning Street.</p>

<p>Occupying an 1,822 sqm site, the proposed towers would rise above a sculptural podium base, with a recessed landscaped centre, rooftop communal areas, and a total of 220 car parks and 256 bicycle bays. The apartment mix spans one- to five-bedroom dwellings, with a design emphasis on generous balconies, cross-ventilation, and climate-responsive materials.</p>

<p><img alt="First look: Twin towers proposed for Manning Street site beside Skyneedle" data-entity-type="file" data-entity-uuid="42c1f501-2afd-440b-af49-67c257123ea7" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Manning%20podium.png?VersionId=KFlksfWzmDRD.VIYxd_1q3VAel.nN3TH" /></p>

<p>“The development is conceived as two slender twin buildings that meet at a lushly landscaped central recess,” the Finegrain design report states. “The façade is highly articulated with the plan form stepping back and forth to reduce visual bulk and maximise internal occupants’ access to natural light and air”.</p>

<p>A hallmark of the proposal is its integration of greenery, both visually and functionally. Around 77 per cent of the site’s green plot ratio is delivered through vertical planting spines, a green podium wall, and rooftop amenity. Ground-level deep planting and landscaped communal zones aim to create a shaded, walkable interface along Manning Street.</p>

<p>“The stepped plan form introduces variation in balcony setbacks and enclosed apartment areas, enriching both the façade expression and the resident experience,” the design team notes. “At ground and podium levels, this stepping also enhances permeability, maximising pedestrian view lines to the neighbouring Skyneedle and reinforcing a strong sense of local identity”.</p>

<p><img alt="First look: Twin towers proposed for Manning Street site beside Skyneedle" data-entity-type="file" data-entity-uuid="b3f26dfc-6b93-465c-9ffb-0a2530372a23" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Manning%20site.png?VersionId=JflvKdqDxcaHTFbb9HL5TwoiRgeQ2LqA" /></p>

<p>The site directly adjoins the heritage-listed Skyneedle at 35 Manning Street, an enduring legacy of World Expo ’88. The accompanying heritage impact report by Pendergast Architects contends that the proposal has been carefully conceived to protect the cultural significance and landmark visibility of the structure.</p>

<p>“The design provides setbacks, tower separation and podium articulation to maintain the visibility and landmark role of the adjoining Skyneedle,” the report states. “The significance of the Skyneedle lies principally in its landmark visibility and cultural symbolism, rather than in detailed fabric or architectural setting”.</p>

<p>The proposal sits within the Kurilpa Sustainable Growth Precinct, under Brisbane’s TLPI 02/2023, where revised planning controls support high-density, mixed-use development integrated with subtropical design and increased public realm contributions.</p>

<p>Finegrain’s design reflects this intent, drawing cues from the site's adjacency to Musgrave Park, the subtropical landscape of South Brisbane, and cultural landmarks such as QPAC and South Bank.</p>


Twin green towers proposed for Manning Street, South Brisbane site beside Skyneedle

Property Crash

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<p>RBA liaison believes it can see through the downturn in construction to the other side.</p>
<p>Below Scutty reports on the latest AiG construction index gauge:</p>
<p class="separator"><img src="https://1.bp.blogspot.com/-XgQZzrxcIIM/XenLm_8jMII/AAAAAAAAzOk/ysAVnkMDPoMCnM41cdRqrZxiiHZVAFM9QCNcBGAsYHQ/s640/AIG1.jpg" width="640" height="136" data-original-height="142" data-original-width="663"></p>
<p class="separator">Apartments (37), engineering (33.3) and commercial (43.7) all came in with very contractionary readings. </p>
<p class="separator"><img src="https://1.bp.blogspot.com/-l136Sd1V4sw/XenLm0vwVNI/AAAAAAAAzOo/L8SgToObOWQzHb4nrfOYEQtYB-oLGwlpACNcBGAsYHQ/s640/AIG2.jpg" width="640" height="204" data-original-height="513" data-original-width="1600"></p>
<p class="separator">Perhaps house building is due to lift soon, but otherwise, it's another stinker.</p>
<p class="separator"><em>PETE WARGENT is the co-founder of AllenWargent property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank">blogger</a>. </em></p>
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pwargent-M4siyDbqQY

Construction continues crashing: Pete Wargent

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<p>It’s hard to read a paper at the moment without finding an array of negative headlines about Sydney’s declining property market.  While media reports paint an overwhelming gloomy picture for the market, a closer look at the data tells a more nuanced story.</p>
<h2>Sydney’s top end dragging down the averages</h2>
<p>The Sydney residential property market as a whole recorded negative growth in the first quarter and for the year to April 2018.</p>
<p>However, the latest data from CoreLogic shows this result was largely driven by the premium end of the market.</p>
<p>The most affordable 20% of dwelling values recorded gains in these periods.</p>
<p>In fact, the more affordable half of Sydney dwelling values recorded an uptick in prices when averaged out over the year to April 2018. However, a pullback at the more expensive end caused the overall average to be weighed down.</p>
<p><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/2017/08/08/shutterstock_343792502.jpg" alt=""></p>
<p>The top end of Sydney dwelling values ($1.4m-$1.8m+) experienced the most significant decline. These properties suffered a substantial 7.2% decline over the 12 months to April 2018 which dragged the average down to -3.4% for the market overall.</p>
<p>Affordable property at the medium-low price ranges (under $875K) has been far more resilient.</p>
<p>“We often tell our investors to read the numbers, and understand the data, not the sensational headlines, and this is a typical case in point,” said Ironfish Head of Property, William Mitchell.</p>
<p>“Sydney has been an incredibly hot market so we do expect the overall market to trend sideways for a period. However, as the data demonstrates, there are sub-markets which can outperform the wider market, and these are the markets that we are looking for when it comes to selecting property to recommend to our investors.</p>
<p>“Though there will be a pullback in prices in pockets of Sydney, owners need to remember the market has increased significantly since the boom began in 2011, so a small adjustment is not a ‘bust’.”</p>
<h2>Melbourne property market continues to perform</h2>
<p>Like Sydney, the headlines for Melbourne property have focussed on the negative; specifically, Melbourne’s marginal decline (-0.7%) in residential property values for the first quarter of 2018.</p>
<p>Yet the data reveals that the Melbourne market has continued to perform, with the vast majority of price points recording positive growth over the 12 months to April 2018.</p>
<p>The affordable end of the market again recorded the largest gains. Properties priced $803K and under recorded an average gain of 9.87% in the year to April 2018 – a very strong result.</p>
<p>Only the most expensive dwellings (i.e. the top 10% of prices) recorded a negative gain in Q1.</p>
<h4>The return of first home buyers </h4>
<div id="ig-8773e3f7-dd3f-1231-f65f-9208c80a9c5b" class="infogram-embed" data-id="8d184527-937a-4799-b7df-1c93ee767c42" data-type="interactive" data-title="First Home Buyers, All States " data-processed="1"> <iframe title="First Home Buyers, All States " src="https://e.infogram.com/8d184527-937a-4799-b7df-1c93ee767c42?src=embed#async_embed" frameborder="0" scrolling="no" width="320" height="240"></iframe>
</div>
<p>The outperformance of more affordable product has been much attributed to more first home buyers returning to the market. This is a trend we’ve seen not just in Sydney and Melbourne, but also across all the 5 major capital cities.</p>
<h4><strong>First Home Buyer mortgages on the rise</strong></h4>
<p>In Melbourne, strong population growth coupled with the increasing appeal of apartment living has further underpinned demand for the affordable end of the market.</p>
<p>Melbourne apartments recorded the strongest capital growth (6.8%) compared to apartments in any of the other 5 major capital cities for the year to April 2018.</p>
<p>Given Melbourne house prices have increased up to 70% since mid-2013, apartments continue to offer a significantly more affordable alternative to buyers.  At current median values, a Melbourne apartment is about 33.9% cheaper than purchasing a standalone house – providing a very strong incentive.</p>
<p>“With the tighter lending environment at the moment, affordability is definitely the flavour of the month. As a result, we are seeing more buyers turning to apartments and this market is expected to perform well in the medium term,” Mr Mitchell said.</p>
<p><span> </span></p>
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jrobinson-rf4aSBido9

Is the property market crashing? 

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<p>Professor Steve Keen is back predicting that Australian house prices will fall by 40%.</p>
<p>Asked by Peter Swizter how long before house prices fall 40%, Keen says five years.</p>
<p>After the GFC he was tipping a similar housing outcome.</p>
<p>He says that day is nearing, as house prices in Sydney are down 14.5% from their July 2017 high, which is their worst fall since the early 1980s recession.</p>
<p>Melbourne prices are down 10.9% from their November 2017 highs, which also is their worst fall in the period since 1980.</p>
<p>Keen, who now resides in Amsterdam after teaching at the University of Kingston in London until recently, maintains that house prices are bound to fall 40%.</p>
<p>He blames the Reserve Bank, claiming it’s the most “brain dead central bank on the planet", and says APRA and the Royal Commission's restrictive bank lending impact will be behind the fall.</p>
<p>Keen says it will be a nightmare for house prices on nationally given household debt compared to our total production of goods and services (or gross domestic product - GDP) is the second highest in the world, only behind Switzerland. </p>
<p>Household debt compared to GDP is at 200% - the highest ever for Australia.</p>
<p>“The RBA and mainstream economists don’t understand the role of credit,” Keen said.</p>
<p>He compares us to the USA which, as a consequence of the GFC of 2008, where there was 39.8% fall in house prices.</p>
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j.ballantyne1990-6AQqhLzZaK

Professor Steve Keen says Australian house prices will fall 40% within five years

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<p><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/2018/9/10/ebook-optimal1.jpg" alt=""></p>
<p>Economists and property experts were tipping price growth across nearly all of Australia's capital cities heading into 2018.</p>
<p>Then as Autumn markets disappointed vendors, the expects thought they should alter their predictions.</p>
<p>With falling house prices, out of cycle home loan rate rises, there's plenty to talk about in property circles this spring.</p>
<p>Enjoy our free e-book on what you need to know about the property market and what's yet to come.</p>
<p>{rsform 99}</p>
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Free eBook: Soft landing or crash? What next for house prices?

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<div>Douglas Driscoll CEO of Starr Partners estimates there are likely further fall in property prices, as some areas cool, but firmly believes the market will not crash.</div>
<div> </div>
<div>He has been seeing a slowdown in the market in some areas as is to be expected, but other areas are still doing extremely well, and he believes reports of a crash are being blow out of proportion.</div>
<div> </div>
<div>Mr Driscoll said that “There has been talk of the market slowing, but 4.4 per cent over 12 months isn’t much and if I were being cynical, it’s not inconceivable that property prices might fall another 10 per cent."</div>
<div> </div>
<div>"The ingredients just aren’t there for a market crash, Whether they’re buying or selling, owner occupiers shouldn’t necessarily hold off."</div>
<div> </div>
<div>"Fearmongering certainly doesn’t help and ultimately creates a wait-and-see mentality”, commented Mr Driscoll.</div>
<div> </div>
<div>Douglas says that a crash simply wont happen because of a number of factors.</div>
<div> </div>
<div>Housing stock levels are strong, interest rates are low, and it is only a matter of time before they rise.</div>
<div> </div>
<div>APRA has relaxed measures for investors, immigration levels are high and the skilled workers that are arriving will want to get their foot on the property ladder.</div>
<div> </div>
<div>He added that he believes the current fear-mongering is more about the potential lack of profits that property might deliver over the next few years.</div>
<div> </div>
<div>John McGrath agrees the <a href="/news/sydney-and-melbourne-property-markets-wont-crash-in-2018-john-mcgrath">Sydney and Melbourne property markets won't crash in 2018</a>.</div>
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Douglas Driscoll, real estate CEO says property market is not headed for a crash

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<p>Expert observer</p>
<p>Australian capital city home prices fell 0.2% in March, their fifth monthly fall in a row. This has brought annual growth down to 0.8% from 11.4% in May last year. Most of the recent weakness relates to Sydney and to a less extent Melbourne.</p>
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<p>Click here <a href="https://www.propertyobserver.com.au/images/2018/4/10/slowing.jpg" target="_blank">to enlarge</a></p>
<p><span><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/2018/4/10/slowing.jpg" alt=""></span></p>
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<p>This is unusual in that property price downturns are usually preceded by significant interest rate increases. Consistent with the fall in Sydney and Melbourne property prices, auction clearance rates and home sales have also fallen.</p>
<p>Click here <a href="https://www.propertyobserver.com.au/images/2018/4/10/clearance.jpg" target="_blank">to enlarge.</a></p>
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<p><span><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/2018/4/10/clearance.jpg" alt=""></span></p>
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<p><span>How far will prices will drop? Will the weakness spread to other cities? And what will it mean for the broader economy? </span></p>
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<p><span>Australia’s Achilles heel – the risk of a crash </span></p>
<p><span>With prices falling in Sydney and Melbourne some see this as the start of a crash. There is good reason to be concerned: </span></p>
<p><span>• </span><span>Real capital city house prices are 27% above their long-term trend (see the next chart) and are at the high end of OECD countries in terms of the ratio of prices to income and rents. </span></p>
<p>Click here <a href="https://www.propertyobserver.com.au/images/2018/4/10/trend.jpg" target="_blank">to enlarge</a></p>
<p><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/2018/4/10/trend.jpg" alt=""></p>
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<p><span>The surge in prices relative to income since the mid-1990s has gone hand in hand with a surge in the ratio of household debt to income that has taken it to the top end of OECD countries. </span></p>
<p><span>• </span><span>With a long period of strong prices and low mortgage rates has come some deterioration in lending standards with the share of new interest only loans reaching around 45% in 2015 and concerns about the reliability of borrowers’ income and living expense assessments when they take out loans. </span></p>
<p><span>• </span><span>Finally, there has been a surge in the supply of apartments, notably in Sydney evident in the high number of residential cranes in use, raising concerns about oversupply. </span></p>
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<p>Click here <a href="https://www.propertyobserver.com.au/images/2018/4/10/crane.jpg" target="_blank">to enlarge.</a></p>
<p><span><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/2018/4/10/crane.jpg" alt=""></span></p>
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<p><span>However, a crash remains unlikely </span></p>
<p><span>While crash calls and stories of mortgage stress are common, they have been repeated endlessly over the last 15 years. But, a crash (say a 20% national average price fall) remains unlikely: </span></p>
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<p><span>First, the real driver of high home prices and their persistence has been that, thanks to tight development controls and lagging infrastructure, the supply of dwellings has not kept pace with population driven demand. Over the last decade annual population growth has averaged about 150,000 above what it was over the decade to the mid-2000s, which would require roughly an extra 50,000 new homes per year. But it’s only recently that supply has caught up with the pick-up in population growth. And population growth remains very strong. </span></p>
<p>Click here <a href="https://www.propertyobserver.com.au/images/2018/4/10/construction.jpg" target="_blank">to enlarge.</a></p>
<p><span><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/2018/4/10/construction.jpg" alt=""></span></p>
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<p><span>Consistent with this average capital city vacancy rates are at or below their long-term averages, notably in Sydney. Secondly, while </span>mortgage stress is a risk: there has been a sharp reduction in interest only loans since APRA strengthened lending standards; debt servicing payments as a share of income have actually fallen slightly over the last decade and Census data shows that the share of owner occupier households with a mortgage for which debt servicing is above 30% of income has fallen from 28% in 2011 to around 20%; a significant number of households with a mortgage are ahead on their repayments; and banks non-performing loans remain low. While there has been some deterioration in lending standards it does not appear to be anything like that seen with NINJA (no income, no job, no assets) loans in the US prior to the GFC.</p>
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<p><span>Finally, it is dangerous to generalise. Property prices have surged in Sydney and Melbourne but have fallen in Perth and Darwin and have seen only moderate growth in other capitals. </span></p>
<p><span>To see a property crash we probably need much higher interest rates or unemployment (neither of which are expected) or a continuation of recent high construction for several years (which is unlikely as approvals have cooled from their 2016 highs). </span></p>
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<p><span>Outlook </span></p>
<p><span>A further tightening in lending standards as banks get tougher on borrowers’ income and living expense levels along with rising supply and more realistic capital growth expectations by home buyers will see Sydney and Melbourne property prices </span>fall another 5% or so this year with further falls likely next year. </p>
<p>Click here <a href="https://www.propertyobserver.com.au/images/2018/4/10/downturn.jpg" target="_blank">to enlarge.</a></p>
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<p><span><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/2018/4/10/downturn.jpg" alt=""></span></p>
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<p><span>Adelaide and Canberra, but it may pick up a bit in Brisbane thanks to stronger population growth and the boom in Hobart has a way to go yet. </span></p>
<p><span>Regional centres are likely to provide relatively faster capital growth reflecting weaker supply and offering more attractive rental yields (around 1.5 percentage points higher than in cities). Units are at greater risk given surging supply, but so far house prices have slowed more in Sydney and Melbourne. </span></p>
<p><span>The property cycle and the economy </span></p>
<p><span>A slowdown in the housing cycle can affect the broader economy via slowing dwelling construction, negative wealth effects on consumer spending and via the banks if mortgage defaults rise. However, as things currently stand the drag from housing construction is likely to be minimal – building approvals don’t point to a collapse in new construction (see the next chart) and it looks like alterations and additions will rise, negative wealth effects will weigh on consumers but not dramatically if we are right, and in the absence of a property price crash the impact on the banks will be manageable. Finally, other sectors of the economy are taking over from housing, eg business investment and state capital works, as being growth drivers. </span></p>
<p>Click here <a href="https://www.propertyobserver.com.au/images/2018/4/10/appr.jpg" target="_blank">to enlarge</a></p>
<p><span><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/2018/4/10/appr.jpg" alt=""></span></p>
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<p><span>Implications for investors </span></p>
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<p>There are several implications for investors:</p>
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<p><span>• </span><span>Firstly, over the very long term residential property adjusted </span>for costs has had a similar return to Australian shares (see next chart). Its low correlation with shares, lower volatility but lower liquidity makes it a good portfolio diversifier. So, there is clearly a role for property in investors’ portfolios. </p>
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<p>Click here <a href="https://www.propertyobserver.com.au/images/2018/4/10/assets.jpg" target="_blank">to enlarge</a></p>
<p><span><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/2018/4/10/assets.jpg" alt=""></span></p>
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<p><span>Secondly, there remains a case to be cautious regarding housing as an investment destination for now. It is expensive on all metrics and offers very low income (rental) yields compared to other growth assets. This means a housing investor is more dependent on capital growth. </span></p>
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<p><span>Thirdly, these comments refer to Australian housing overall but it’s dangerous to generalise. Other cities and regional property are far more attractive than Sydney &amp; Melbourne. </span></p>
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<p><span> <span class="s1"><a href="https://www.propertyobserver.com.au/https://plus.google.com/110172465327488162875?rel=author"><em>SHANE OLIVER</em></a></span><span class="s2"><em> is head of investment strategy and economics and chief economist at </em><a href="https://www.ampcapital.com.au/home"><span class="s1"><em>AMP Capital</em></span></a><em> and is responsible for AMP Capital's diversified investment funds.</em></span></span></p>
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<p><span> </span></p>
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soliver-smf6LQXgW9

Falling prices in Sydney and Melbourne - is this the crash?

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<p>A record number of new apartments set to hit the market this year in capital cities was unlikely to trigger a property price collapse, Bank of America-Merill Lynch economists say.</p>
<p>The already moderating property market will instead lead to fewer housing starts which will mean there was a prospect of an undersupply by 2020.</p>
<p>"The stage is being set for the next property cycle," BAML economists Tony Morriss and Alexandra Veroude suggested in a recent research note.</p>
<p>"Forget oversupply," they write, urging their clients to look beyond this year's headlines.</p>
<p>There are "risks of undersupply brewing" with building approvals having peaked in 2015.</p>
<p>The current assumed abundance of new housing will flip to scarcity by 2020, the BAML economists advised according to a report in The Australian Financial Review.</p>
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<p>"With population growth expected to keep underlying housing demand robust, we see underlying demand outpacing supply in Australia's largest housing markets, New South Wales, Victoria and Queensland, from 2020," they wrote.</p>
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<p>"Laws of supply and demand suggest that house price pressures would be expected to build from this time."</p>
<p>"Our analysis supports our view that any oversupply now, with Brisbane of greatest concern, should not create large imbalances over an extended period and present as a risk to financial stability."</p>
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<p>"To date, settlement defaults remain low and, given our analysis, we do not expect settlement defaults to rise significantly - particularly in an environment where the economic outlook is strengthening and the labour market is tightening," they wrote.</p>
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Assumed apartment abundance could turn to undersupply, but Brisbane a worry: BAML

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<p>Melbourne and Sydney housing prices face a one-in-five risk of price correction, with JP Morgan saying there's little chance of a correction in the next five years.</p>
<p>It ranks as 19% for Melbourne and 18% for Sydney, JP Morgan economist Henry St John said after prices have been rising faster against wages.</p>
<p>The chance of steep price falls in Brisbane or Adelaide is rated at 8%, while the odds of a further 15%-plus slide in Perth prices is 7%.</p>
<p>The ABC advised St John arrived at his estimates by examining not only absolute price growth but also price-to-income and price-to-rent ratios to calculate how far out of whack the current real estate market is with historical averages.</p>
<p>"The fact that those valuation ratios in Melbourne haven't ever really had a deep pull-back means price gains have persistently dominated income and rental rate growth for a very long history," St John said.</p>
<p>This time last year the JP Morgan team forecast "major risks" for the listed property companies in Brisbane and Melbourne apartment settlements during 2017, which did not happen.</p>
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