<p>Brunswick’s civic heart continues to consolidate around the Merri-bek Arts and Culture Precinct, where a growing cluster of cultural institutions, recreation facilities, and public infrastructure has created one of the inner north’s most defined community hubs.&nbsp;</p>

<p>Within this evolving precinct, <a href="https://www.apartments.com.au/new-apartments/saxon-street-by-milieu-brunswick-31-saxon-street-brunswick-vic-3056">Saxon Street by Milieu</a> introduces new housing directly alongside the civic anchors that shape daily life in the suburb.</p>

<p>At 31 Saxon Street, the project sits immediately beside Brunswick Baths and within moments of Brunswick Library and Town Hall, longstanding institutions that support both community services and everyday amenity.&nbsp;</p>

<p>[smartcode_project:default project_id=136434 project_image_fid=348840]</p>

<p>Next door, the newly delivered Balam Balam Place arts precinct has emerged as a central piece of Merri-bek Council’s cultural strategy, bringing together creative studios, exhibition spaces, maternal and child health services, and community programming in a purpose-built civic facility. Together, these destinations have reinforced the surrounding blocks as a focal point for public life in Brunswick.</p>

<p>This part of <a href="https://www.apartments.com.au/developments/brunswick-vic-3056">Brunswick</a> forms a key pocket within the suburb’s designated Major Activity Centre, where long-term planning has prioritised walkability, civic investment, and increased housing supply close to transport and services. The surrounding street network reflects that strategy, with compact blocks, established retail corridors and active transport links supporting a lifestyle that is largely navigable on foot.</p>

<p>Within a few minutes’ walk, Sydney Road delivers one of Melbourne’s most recognisable streets, known for its long-running mix of independent retailers, international dining venues and everyday convenience. Tram routes along Sydney Road provide frequent connections south toward the CBD and north through Brunswick and Coburg, while Jewell Station on the Upfield line sits within roughly a ten-minute walk, offering direct train access into the city.</p>

<p>[smartcode_project:default project_id=136434 project_image_fid=348839]</p>

<p>Active transport also plays a significant role locally. The nearby Upfield Bike Path forms a key north–south cycling corridor linking Brunswick through Parkville and into the central city, reinforcing the area’s reputation as one of Melbourne’s most accessible inner-urban neighbourhoods for cyclists and pedestrians alike.</p>

<p>The surrounding civic cluster extends beyond cultural infrastructure. Siteworks, a nearby creative hub supporting artists and community organisations, adds to the concentration of cultural activity in the immediate area. Educational institutions such as Brunswick North Primary School, Brunswick Secondary College and RMIT’s Brunswick campus are also within easy reach, contributing to the suburb’s diverse resident base spanning families, students and professionals.&nbsp;</p>

<p>[smartcode_project:default project_id=136434 project_image_fid=348841]</p>

<p>Designed by <a href="https://www.apartments.com.au/architects/jackson-clements-burrows-architects">Jackson Clements Burrows Architects</a> in collaboration with <a href="https://www.apartments.com.au/interior-designers/designoffice">DesignOffice</a> and landscape architects <a href="https://www.apartments.com.au/landscape-architect/oculus">OCULUS</a>, the nine-level building has been shaped to respond to the surrounding streetscape, with lower levels aligning to the street and upper storeys stepping back to soften its scale and improve solar access.&nbsp;</p>

<p>Curved balcony forms reference nearby heritage architecture, while the development’s public realm improvements include a widened footpath along Saxon Street to strengthen pedestrian connections between the precinct’s civic sites.</p>

<p>Sustainability also underpins the project’s approach. The building is designed to operate entirely on electric infrastructure supported by rooftop solar, with an average 7.5-star NatHERS energy rating and EV-charging readiness across the development. Shared resident amenities will include a landscaped rooftop terrace with barbecue and covered dining areas intended to encourage informal interaction between residents.</p>

<p>Saxon Street marks developer Milieu's fifth project in Brunswick and continues its focus on design-led infill housing across Melbourne’s inner suburbs.&nbsp;</p>

<p>Construction has commenced through reputable builder Manresa, who will complete the project in 2027.</p>

<p>[smartcode_project_cta:default project_id=136434]</p>


Joel Robinson

Saxon Street by Milieu connects residents to Brunswick’s cultural and civic core

<p>Within <a href="https://www.apartments.com.au/new-apartments/candela-ivanhoe-40-upper-heidelberg-road-ivanhoe-vic-3079">Candela Ivanhoe</a>, <a href="https://www.apartments.com.au/developers/salter-brothers">Salter Brothers</a>&nbsp;takes a different approach to larger residences, moving away from the constraints of a single level.</p>

<p>In Grand Residence 3.05, known as the Lustre, plays out across two levels, with a mezzanine configuration that is uncommon in apartment living.</p>

<p>Lustre is a four-bathroom residence where the layout creates a clear distinction between shared and private zones, with uninterrupted views toward the Dandenong Ranges extending the sense of openness from the main living areas.</p>

<p>Entry is to the primary living level, where the kitchen, dining, and living areas are arranged as one continuous space. Timber flooring runs throughout, with a fireplace set within the living zone. Full-height glazing brings in natural light, supported by double glazing that improves thermal performance.</p>

<p>[smartcode_project:default project_id=342 project_image_fid=357506]</p>

<p>The kitchen is configured as both a working and social space. A large island bench provides seating, while a walk-in pantry extends storage beyond typical apartment expectations.</p>

<p>Gaggenau appliances, including a 900mm gas cooktop and 600mm oven, are integrated into a layout that connects directly to the adjacent dining and living areas, and outward to the terrace. This balcony includes a built-in BBQ, reinforcing the apartment’s capacity to accommodate larger gatherings without compromising internal space.</p>

<p>A dedicated laundry room, powder room, and a wine cellar area sit discreetly off the main living zone, ensuring that functional requirements are resolved without encroaching on primary living areas. The master suite is also located on this level, designed as a retreat with a walk-through wardrobe and an ensuite that includes double vanities, a bath, and a dedicated dressing table.</p>

<p>[smartcode_project:default project_id=342 project_image_fid=357508]</p>

<p>The mezzanine level introduces a second layer of living, rather than simply additional bedrooms. Two large bedrooms with built-in robes are positioned alongside a central bathroom, while a secondary lounge and study area create a self-contained zone suited to children, guests, or extended family. A large storage room further supports long-term usability, addressing a common shortfall in apartment design.</p>

<p>This separation of levels is central to how the residence functions day-to-day. It allows the lower level to operate as the primary entertaining and living space, while the upper level provides privacy and flexibility. The result is closer in feel to a townhouse or standalone home, but with the benefits of apartment living, security, and low maintenance.</p>

<p>[smartcode_project:default project_id=342 project_image_fid=364553]</p>

<p>Candela is close to 80 per cent complete, with Ironside delivering construction ahead of its expected October 2026 completion. The development comprises 58 residences, with a strong owner-occupier profile and a mix of one to four-bedroom apartments and loft-style townhouses.</p>

<p>Candela has exclusive access to private amenities, including a residential lounge and rooftop terrace. A charming café and a lifestyle wellness centre are located on the ground level, designed to foster community connection and extend the living experience beyond individual apartments without competing with the scale of homes like Lustre.</p>

<p>Candela, positioned in the heart of Ivanhoe Village, reinforces the practicality of the address. With a Walk Score of 90, residents are within immediate reach of cafés, retail, parklands, and Ivanhoe Station, while also benefiting from proximity to established schools and healthcare services.</p>

<p>[smartcode_project_cta:default project_id=342]</p>


Inside Lustre: Grand Residence 3.05 at Candela Ivanhoe

<p><a href="https://www.apartments.com.au/developers/milieu-property">Milieu</a>’s <a href="https://www.apartments.com.au/new-apartments/elsternwick-gardens-by-milieu-8-gordon-street-elsternwick-vic-3185">Elsternwick Gardens</a> is being shaped around a simple but increasingly rare premise in apartment development: that the built environment should actively support residents’ wellbeing.&nbsp;</p>

<p>Located on the former ABC Studios site on Gordon Street in Melbourne’s south-east, the new neighbourhood sits on an expansive 11,740 sqm site neighbouring the heritage-listed Rippon Lea Estate, whose gardens date back more than 140 years.</p>

<p>Rather than positioning wellness as an add-on amenity, the development integrates it into the physical planning of the site. Architecture by <a href="https://www.apartments.com.au/architects/woods-bagot">Woods Bagot</a> is arranged across six low-rise buildings set within extensive landscaping designed by <a href="https://www.apartments.com.au/landscape-architect/oculus">OCULUS</a>, with more than 40 per cent of the land dedicated to gardens and green space. Walking trails, pocket gardens, and mature trees are threaded between buildings, creating a network of green corridors that encourage residents to move through the precinct on foot and spend more time outdoors.</p>

<p>[smartcode_project:default project_id=136535 project_image_fid=288420]</p>

<p>Milieu has intentionally framed these gardens as an extension of the neighbouring Rippon Lea Estate. More than 16,000 new plants will be introduced across the site, with species carefully selected to protect and complement the area’s ecological significance. The approach focuses on strengthening existing environmental conditions while establishing new habitats that support native wildlife, reinforcing the role of the landscape as both an active ecosystem and a defining element of daily life.</p>

<p>A private resident gate will provide direct access to the historic grounds during opening hours, allowing residents to move seamlessly between the development’s landscaped gardens and the estate’s expansive lawns, lakes, and mature trees. The project’s gardens will also be maintained by the same gardeners responsible for Rippon Lea, reinforcing the visual and ecological continuity between the two landscapes.</p>

<p>Complementing the landscape is a dedicated wellness hub designed to support everyday health and recovery. Residents will have access to a gym alongside yoga and Pilates studios, while mineral pools and infrared saunas provide spaces for relaxation and restorative wellbeing. Shared lounges, workshop spaces, and pet care facilities expand the concept of wellness beyond fitness, creating opportunities for social connection and community interaction within the precinct.</p>

<p>Environmental performance is another key component of the project’s wellbeing focus. Elsternwick Gardens will be entirely fossil-fuel-free, with homes designed to operate on renewable electricity rather than gas. Passive design strategies, including cross-flow ventilation, high-performance insulation, and thermally broken double glazing, are intended to maintain comfortable indoor temperatures while reducing energy demand. Solar photovoltaic systems will power common building services, while rainwater harvesting will help irrigate the extensive landscaping across the site.</p>

<p>[smartcode_project:default project_id=136535 project_image_fid=361030]</p>

<p>Milieu Founder and Managing Director Michael McCormack says the scale and setting of the project allowed the team to take a different approach to urban apartment living.</p>

<p>“This site represents a once-in-a-lifetime opportunity to build something truly special,” McCormack says.</p>

<p>“Through that process, we arrived at a design that centres on a fully realised natural landscape – a series of private, interconnected gardens that encircle the homes and extend seamlessly from Rippon Lea Estate.”</p>

<p>Elsternwick Gardens will comprise three residential offerings, Gordon Place, Ripponlea Terrace, and The Garden Pavilion, each designed for owner-occupiers and shaped around high-quality interior design by Woods Bagot, K.P.D.O., and Flack Studio. The first stage, Gordon Place, includes one-, two-, and three-bedroom apartments designed with a strong focus on indoor-outdoor living and sustainability.</p>

<p>[smartcode_project:default project_id=136535 project_image_fid=288412]</p>

<p>Milieu recently appointed <a href="https://www.apartments.com.au/builders/brady-constructions">Brady Constructions</a> to deliver the project, marking a key milestone for the development. The appointment follows the demolition of the former studio buildings on the Gordon Street site, with construction progressing toward the delivery of the nature-led community.</p>

<p>Situated between the established villages of Elsternwick and Ripponlea, the development balances its garden setting with strong urban connectivity. Residents will be within walking distance of cafés, restaurants, and local retail, while nearby train and tram connections provide quick access to Melbourne’s CBD and the beaches of Elwood and St Kilda.</p>

<p>With construction underway and the first residents expected to move in by early 2027, Elsternwick Gardens represents a growing shift in apartment development toward environments that prioritise wellbeing as much as density or location. By placing landscape, sustainability, and shared spaces at the centre of the design, Milieu is positioning the project as a residential neighbourhood where wellness is not just promoted, but built into the structure of everyday life.</p>

<p>[smartcode_project_cta:default project_id=136535]</p>


Elsternwick Gardens' wellness-first design strategy

<p>Brisbane-based developer <a href="https://www.apartments.com.au/developers/red-co">Red &amp; Co</a> has made a striking debut on the Gold Coast, officially unveiling its $250 million COMO development in Varsity Lakes, a lifestyle-driven residential project anchored by an extensive rooftop wellness and activity precinct.</p>

<p>Having recently launched to market, construction has already been fast-tracked by <a href="https://www.apartments.com.au/builders/5point-projects">5Point Projects</a>, ensuring momentum continues on what is set to become a landmark residential address for the growing Varsity Lakes community.</p>

<p>Located at 22 Lake Street, Varsity Lakes, <a href="https://www.apartments.com.au/new-apartments/como-varsity-lakes-22-lake-street-varsity-lakes-qld-4227">COMO</a> will comprise 156 apartments across 16 levels, comprising one-, two- and three-bedroom residences designed for modern living. However, it is the project’s rooftop amenity offering that sets COMO apart.</p>

<p>[smartcode_project:default project_id=135546 project_image_fid=363510]</p>

<p>Designed as a dedicated wellness and recreation hub, the rooftop will feature a 25-metre lap pool, fully equipped gymnasium, and multiple pickleball and paddleball courts - amenities rarely seen in boutique apartment projects.</p>

<p>Residents will also have access to a sauna and plunge baths, while landscaped gardens and relaxation zones will provide tranquil spaces overlooking sweeping panoramic views across the Gold Coast skyline.</p>

<p>The rooftop precinct has been designed to function as the social and wellness heart of the development, encouraging residents to embrace an active, balanced lifestyle within their own building.</p>

<p>&nbsp;</p>

<p>[smartcode_project:default project_id=135546 project_image_fid=363512]</p>

<p>Red &amp; Co director David Laverty said the amenity offering was central to the project’s design from the outset.</p>

<p>“Amenities were at the forefront of our decisions,” Laverty said.</p>

<p>“Buyers today are looking for more than just an apartment - they want a lifestyle that promotes health, connection and balance.</p>

<p>“The rooftop at COMO has been designed to be the epicentre of that lifestyle, with a suite of wellness and recreation facilities that are quite unique for a boutique development of this scale.”</p>

<p>&nbsp;</p>

<p>[smartcode_project:default project_id=135546 project_image_fid=363514]</p>

<p>Designed by <a href="https://www.apartments.com.au/architects/bda-architecture">BDA Architecture</a>, the residences prioritise liveability, featuring spacious layouts, 2.7-metre ceilings and high-quality finishes throughout.</p>

<p>The development sits beside Bond University, placing residents within walking distance of education, retail and dining options within the vibrant Varsity Lakes precinct, including Robina Town Centre, Varsity Lakes Train Station and a range of leading schools.</p>

<p>[smartcode_project:default project_id=135546 project_image_fid=363511]</p>

<p>Laverty said the location was a key driver behind Red &amp; Co’s decision to bring the project to the Gold Coast.</p>

<p>“<a href="https://www.apartments.com.au/developments/varsity-lakes-qld-4227">Varsity Lakes</a> was a clear choice for us to invest in as it’s a lifestyle hub that seamlessly blends lakeside living with urbanity,” he said.&nbsp;</p>

<p>“Como will capitalize on this great location, delivering a project that not only creates premium homes, but a lifestyle defined by community, wellbeing, and connectivity.”</p>

<p>Red &amp; Co has delivered more than 500 apartments and townhouses across 26 projects in Brisbane in recent years, with COMO marking the company’s first major Gold Coast development.</p>

<p>[smartcode_project_cta:default project_id=135546]</p>


Red & Co unveils amenity-rich Como development in Varsity Lakes

<p>Gold Coast developer&nbsp;<a href="https://www.apartments.com.au/developers/big-projects">Big Projects</a> has secured approval for its second Mermaid Beach project.</p>

<p>The developer, currently selling <a href="https://www.apartments.com.au/new-apartments/the-frederick-mermaid-beach-2265-gold-coast-highway-mermaid-beach-qld-4218">The Frederick in Nobby Beach</a>, has secured approval for its next project just 1.5 kilomnetres up the road.</p>

<p>The new development, dubbed&nbsp;<a href="https://www.apartments.com.au/new-apartments/glenelg-residences-2462-2472-gold-coast-highway-mermaid-beach-qld-4218">Glenelg Residences</a>, has been designed by BDA Architecture and&nbsp;will have just under 100 apartments across an 11-storey building&nbsp;at 2462–2472 Gold Coast Highway, on the corner of Glenelg Avenue just under 300m from the future Mermaid Beach Light Rail stop.</p>

<p>The apartments, a mix of two- and three-bedrooms, will sit above a retail-focused ground plane and under extensive rooftop resident amenities.</p>

<p><img alt="Exclusive: Big Projects plot Mermaid Beach apartment development, Glenelg Residences" 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/Screen%20Shot%202024-06-11%20at%209.55.04%20am.png?VersionId=z6NV4izeuvhBSSVlY6vK6TPO1LxrFeaG" /></p>

<p>BDA said in its planning submission that the project is intended to support the area’s transition toward higher-density, mixed-use living. “This project offers the opportunity to generate appropriate higher-intensity development within the future Light Rail corridor of <a href="https://www.apartments.com.au/developments/mermaid-beach-qld-4218">Mermaid Beach</a>,” the submission noted.</p>

<p>At ground level, Glenelg Residences will include eight retail tenancies designed to activate the street frontage, complemented by a basement bar offering an additional hospitality element. Above, residents will have access to a rooftop amenity deck featuring an infinity pool, hot and cold plunge spas, day beds, and barbecue facilities.</p>

<p>The architectural approach adopts a restrained material palette of brick, textured concrete, and integrated landscaping, with cantilevered concrete frames and cascading planting intended to soften the built form. BDA described the design as aiming to create “a memorable sculptural mid-rise mixed-use building” that responds to both its coastal setting and urban context.</p>

<p><img alt="Exclusive: Big Projects plot Mermaid Beach apartment development, Glenelg Residences" 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/Screen%20Shot%202024-06-11%20at%209.55.45%20am.png?VersionId=cpjIVBqcT_sujmo2UMWkVyLcQ7WGJHaQ" /></p>

<p>The approval comes as the City of Gold Coast continues to plan for significant population growth, with regional targets requiring more than 100,000 new high-density dwellings by 2046.</p>

<section data-scroll-anchor="false" data-testid="conversation-turn-36" data-turn="assistant" data-turn-id="request-WEB:55d7c6ac-8e6d-4881-ad49-0ed9bf66d1cc-17" dir="auto">
<p data-end="436" data-is-last-node="" data-is-only-node="" data-start="244">Big Projects, led by Matthew and John Barrett, is part of a growing cohort of developers that deliver construction in-house, providing a high level of confidence to prospective purchasers.</p>
</section>

<p>[smartcode_project_cta:default project_id=150260]</p>


Big Projects secures approval for Glenelg Residences in Mermaid Beach

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>
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<div>"Fearmongering certainly doesn’t help and ultimately creates a wait-and-see mentality”, commented Mr Driscoll.</div>
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<div>Douglas says that a crash simply wont happen because of a number of factors.</div>
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<div>Housing stock levels are strong, interest rates are low, and it is only a matter of time before they rise.</div>
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<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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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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