<p>For most new apartment buildings, the Owners Corporation starts life with little more than a bank account and the first quarterly strata levies.</p>

<p>At <a href="https://www.apartments.com.au/buildings/9-gay-street-castle-hill-9-gay-street-castle-hill-nsw-2154">9 Gay Street</a> in <a href="https://www.apartments.com.au/developments/castle-hill-nsw-2154">Castle Hill</a>, it starts with around $7 million in reserve.</p>

<p>It's an unusual legacy of what was once one of Sydney's highest-profile apartment remediation projects. When the development, originally known as Skyview and built by disgraced developer Top Place, came under scrutiny by then NSW Building Commissioner David Chandler, an $11 million remediation bond was negotiated to ensure any building defects could be fully rectified.</p>

<p>The building underwent an 18-month remediation program, during which around $4 million of that bond was spent bringing the building up to the standard it should have been in from the outset.</p>

<p>After extensive inspections, all active rectification orders have been lifted. What's more, around $7.2 million remains secured for the Owners Corporation for the next 15 years.</p>

<p>In a twist few would have predicted, what began as a significant concern for purchasers has left the building with something almost unheard of in the apartment market: a multi-million-dollar financial reserve from day one.</p>

<p>[smartcode_project:default project_id=147685 project_image_fid=359136]</p>

<p><a href="https://www.apartments.com.au/project-marketer/equitifund-group">Equitifund</a> Executive Chairman Greg Huxley said the structure offers buyers a level of certainty that is difficult to replicate.</p>

<p>"The $11 million bond established for the Skyview Castle Hill development represents exceptional value, providing genuine financial security for purchasers," Huxley said.</p>

<p>"Unlike a standard insurance policy, this bond consists of real funds held in trust for the Owners Corporation, offering a tangible layer of protection and added peace of mind."</p>

<p>The apartments themselves have been designed with a focus on practical, contemporary living. Interiors feature Smeg appliances, stone benchtops, tiled living areas, carpeted bedrooms, 2.7-metre ceilings, floor-to-ceiling glazing, and ducted heating and cooling throughout.</p>

<p>Residents also have access to a range of shared amenities, including two rooftop barbecue areas, a swimming pool, children's playgrounds, secure building access, storage cages, and visitor parking.</p>

<p>The location continues to be one of the project's strongest drawcards. Castle Hill Metro Station sits virtually on the doorstep, providing direct connections across Sydney's expanding Metro network, while Castle Towers offers extensive retail, dining, entertainment, and service amenities within walking distance.</p>

<p>[smartcode_project:default project_id=147685 project_image_fid=359127]</p>

<p>The building, now named after its location at 9 Gay Street, comprises a diverse mix of one-, two-, and three-bedroom apartments starting from just under $600,000.</p>

<p>Equitifund National Sales Director Ben Hamblett said demand in the Hills District continues to be driven by buyers seeking convenience and connectivity.</p>

<p>"Interest from both owner-occupiers and investors in Castle Hill remains exceptionally strong, with buyers consistently prioritising developments in close proximity to the Metro station and Castle Towers Shopping Centre," Hamblett said.</p>

<p>"There is a clear trend in the market, with purchasers seeking convenient access to transport and lifestyle amenities that support a seamless, low-maintenance way of living."</p>

<p>On top of the long-term protection afforded by the remaining $7.2 million bond, Equitifund is offering a limited-time stamp duty rebate on selected apartments.</p>

<p>Eligible purchasers can also secure finance options, including a 3.99 per cent two-year variable rate, loan-to-value ratios of up to 90 per cent, and interest-only lending options through EquitiCredit.</p>

<p>[smartcode_project_cta:default project_id=147685]</p>


Joel Robinson

Why this Castle Hill apartment building starts with a $7 million advantage

<p>For much of the past few years, conversations about Australia's property market have centred on the rapid growth seen in Sydney, Brisbane, Gold Coast, and Perth. <a href="https://www.apartments.com.au/developments/melbourne-vic-3004">Melbourne</a> has followed a different trajectory.</p>

<p>That relative underperformance is now encouraging some buyers to reassess the city, particularly those willing to look beyond short-term market movements and focus on quality property in established locations, along with the long-term growth prospects of a city expected to overtake Sydney as Australia’s most populous.</p>

<p>John Bekiaris, Research &amp; Market Insights at <a href="https://www.apartments.com.au/project-marketer/equitifund-group">Projects by Equitifund</a>, said Melbourne's current position is attracting increasingly sophisticated purchasers.</p>

<p>"Melbourne continues to present one of Australia's strongest long-term investment stories," Bekiaris says.</p>

<p>"While other capital cities have experienced stronger recent growth, that relative underperformance is exactly what's attracting sophisticated counter-cyclical investors."</p>

<p>[smartcode_project:default project_id=1979 project_image_fid=363268]</p>

<p>Equitifund isn't just commenting on Melbourne's property market, it's investing in it.</p>

<p>The Sydney-headquartered capital partner has taken over the remaining apartments at <a href="https://www.apartments.com.au/buildings/victoriana-melbourne-20-queens-road-melbourne-vic-3004">Victoriana</a>, the recently completed glass-encased development opposite Albert Park Lake in Melbourne's tightly held St Kilda Road precinct.</p>

<p>Designed by <a href="https://www.apartments.com.au/architects/rothelowman">Rothelowman</a> and built by <a href="https://www.apartments.com.au/builders/hickory">Hickory</a>, Victoriana places residents between one of Melbourne's most recognised parklands and the CBD, offering oversized two and three-bedroom apartments aimed at owner-occupiers seeking a genuine alternative to a traditional family home.</p>

<p>The development comprises 232 completed residences alongside a suite of resident amenities, including a 25-metre indoor swimming pool, gymnasium, landscaped entertaining areas, resident lounges, EV charging, secure basement parking and a concierge-style arrival experience.</p>

<p>[smartcode_project:default project_id=1979 project_image_fid=363229]</p>

<p>The apartments have been designed with owner-occupiers firmly in mind.&nbsp;Open-plan living and dining areas flow onto generous balconies framing views across Albert Park Lake, Fawkner Park, the Royal Botanic Gardens and the Melbourne skyline.</p>

<p>Kitchens feature Gaggenau appliances, stone benchtops and generous preparation space. Bedrooms include built-in robes, while bathrooms feature full-height textured tiling. Hardwood flooring and ducted air conditioning complete residences designed for long-term living.</p>

<p>Rothelowman's architecture takes its cues from the landscape opposite the site. Sweeping horizontal glazing references the movement of Albert Park Lake, while generous balconies and expansive glazing strengthen the connection between the apartments and the surrounding parklands. The result is a building designed to deliver the scale and amenity expected of luxury apartment living, while offering the larger floorplans increasingly sought by owner-occupiers.</p>

<p>[smartcode_project:default project_id=1979 project_image_fid=363284]</p>

<p>The location is one of Victoriana's defining characteristics. Positioned on Queens Road, residents are directly opposite Albert Park Lake and within easy reach of Fawkner Park, the Royal Botanic Gardens, South Melbourne, St Kilda Road and the CBD. With few comparable development opportunities remaining in the precinct, buyers are increasingly placing value on outlooks that are unlikely to be interrupted by future construction.</p>

<p>Greg Huxley, Founder of Equitifund, believes those qualities become even more valuable over time.</p>

<p>"Premium real estate has always rewarded buyers who take a long-term view," Huxley said.</p>

<p>"Victoriana represents the kind of asset that's increasingly difficult to recreate today, particularly in an established location like Queens Road."</p>

<p>He said rising construction costs are also changing the way buyers assess completed developments.</p>

<p>"When you combine an irreplaceable location with thoughtful architecture and premium finishes, you create something that becomes increasingly difficult to reproduce as construction costs continue to rise."</p>

<p>[smartcode_project:default project_id=1979 project_image_fid=363228]</p>

<p>According to National Sales Director Ben Hamblett, enquiry has been driven largely by Melbourne downsizers and buyers upgrading from smaller apartments.</p>

<p>"Interest in Victoriana continues to build, with strong buyer focus on the larger owner-occupier residences within the development," Hamblett says.</p>

<p>"Enquiry is increasingly driven by local buyers who recognise the rarity of what's on offer: park-facing apartments in an established neighbourhood where new development opportunities are becoming increasingly scarce. At Victoriana, the view is not just a feature; it's an appreciating asset in its own right."</p>

<p>He said interstate enquiry has also strengthened as buyers reassess Melbourne's position within the national property cycle.</p>

<p>"Melbourne currently stands as the most compelling entry point of any major Australian capital, and discerning buyers are beginning to recognise what those who move early always understand: the best opportunities are taken before the price rise confirms them."</p>

<p>[smartcode_project_cta:default project_id=1979]</p>


Why now is the time to buy in Melbourne's premium apartment market

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


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

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

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


Sherpa sells out Flourish Oasis in booming Palm Beach

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


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

Property Crash

<html><body>
<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>
</body></html>

pwargent-M4siyDbqQY

Construction continues crashing: Pete Wargent

<html><body>
<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>
</body></html>

jrobinson-rf4aSBido9

Is the property market crashing? 

<html><body>
<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>
</body></html>

j.ballantyne1990-6AQqhLzZaK

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

<html><body>
<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>
</body></html>

Free eBook: Soft landing or crash? What next for house prices?

<html><body>
<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>
</body></html>

Douglas Driscoll, real estate CEO says property market is not headed for a crash

<html><body>
<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>
<div class="page" title="Page 1">
<div class="layoutArea">
<div class="column">
<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>
<div class="page" title="Page 1">
<div class="layoutArea">
<div class="column">
<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>
</div>
</div>
</div>
<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>
<div class="page" title="Page 1">
<div class="layoutArea">
<div class="column">
<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>
<div class="page" title="Page 1">
<div class="layoutArea">
<div class="column">
<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>
<div class="page" title="Page 1">
<div class="layoutArea">
<div class="column">
<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>
</div>
</div>
</div>
<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>
<div class="page" title="Page 1">
<div class="layoutArea">
<div class="column">
<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>
<div class="page" title="Page 2">
<div class="layoutArea">
<div class="column">
<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>
<div class="page" title="Page 2">
<div class="layoutArea">
<div class="column">
<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>
</div>
</div>
</div>
<div class="page" title="Page 2">
<div class="layoutArea">
<div class="column">
<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>
</div>
</div>
</div>
<div class="page" title="Page 2">
<div class="layoutArea">
<div class="column">
<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>
</div>
</div>
</div>
<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>
</div>
</div>
</div>
<div class="page" title="Page 2">
<div class="layoutArea">
<div class="column">
<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>
<div class="page" title="Page 2">
<div class="layoutArea">
<div class="column">
<p><span>Implications for investors </span></p>
</div>
</div>
</div>
<p>There are several implications for investors:</p>
<div class="page" title="Page 2">
<div class="layoutArea">
<div class="column">
<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>
</div>
</div>
</div>
<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>
<div class="page" title="Page 2">
<div class="layoutArea">
<div class="column">
<ul>
<li>
<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>
</li>
<li>
<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>
</li>
</ul>
</div>
</div>
</div>
</div>
</div>
</div>
<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>
</div>
</div>
</div>
</div>
</div>
</div>
<p><span> </span></p>
</div>
</div>
</div>
</div>
</div>
</div>
</body></html>

soliver-smf6LQXgW9

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

<html><body>
<div>
<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>
</div>
<div>
<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>
</div>
<div>
<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>
</div>
<div>
<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>
</div>
</body></html>

jchancellor-FAypfDUnLy

Assumed apartment abundance could turn to undersupply, but Brisbane a worry: BAML

<html><body>
<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>
<p> </p>
</body></html>

Property Crash

Editor's Picks

Have something to contribute?

Developments

New apartments

New townhouses

News

Property Crash

Editor's Picks

Receive the latest news stories to your inbox

Have something to contribute?

Developments

New apartments

New townhouses

News