Malaysian developer <a href="https://www.apartments.com.au/developers/s-p-setia">SP Setia</a> is the latest to jump into St Leonards booming Transport Oriented Development precinct.

The developer, which has previously delivered Sapphire by the Gardens apartment development in Melbourne, identified the Atchison Street site in 2023. It filed a Scoping Report around 12 months ago, and now has revealed the designs for the new&nbsp;40-storey mixed-use tower.

The State Significant Development Application covers <a href="https://next-portal.urban.com.au/projects/14650/summary">20-22 Atchison Street</a>, a 1,374 sqm site positioned between St Leonards Station and the new Crows Nest Metro station.

Designed by <a href="https://www.apartments.com.au/architects/cox-architecture">COX Architecture</a>, the project would deliver 181 apartments, above a four-storey commercial podium, five basement levels, and new public domain works along Mitchell Street. The apartment mix comprises 35 one-bedroom apartments, 39 one-bedroom-plus-study apartments, 85 two-bedroom apartments, and 22 three-bedroom residences.

The proposal has been lodged as a shop-top housing development under the NSW Government’s TOD planning pathway, which allows increased density around key transport infrastructure. The site sits within the recently rezoned Crows Nest Accelerated TOD Precinct.

<img alt="First look: SP Setia targets St Leonards skyline with 40-storey TOD tower" data-entity-type="file" data-entity-uuid="b799673d-48e2-46b0-801a-0e33a9330100" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/atchinson%20site.png?VersionId=dPh0UfwfaHpbFL1R7H1cbZNbIW0CHbCC" />

SP Setia acquired the Atchison Street site as part of its continued expansion into the Australian apartment market. In comments made to City &amp; Country (The Edge Malaysia) in 2023, SP Setia President and CEO Datuk Choong Kai Wai described the acquisition as “a strategic move” aligned with the group’s post-pandemic market recovery strategy.

“Our target for this exceptional development is local and overseas buyers, including first-home buyers, downsizers and investors,” Choong said.

The tower has been designed as a slender vertical form rising from a mixed-use podium, with COX Architecture positioning the development as a response to the evolving St Leonards and Crows Nest skyline.

“The purpose of the project is to facilitate the delivery of high-quality housing at a strategically located site and deliver a built tower outcome that is consistent with the desired future character of St Leonards and aligns with the TOD controls,” the design report stated.

<img alt="First look: SP Setia targets St Leonards skyline with 40-storey TOD tower" data-entity-type="file" data-entity-uuid="b1a85eee-76f7-436c-a6da-73ba827b9b13" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/atchinson%20entry.png?VersionId=dA9jHGPMcm.dDbwk4QfxqWiY5bfh3UVt" />

The podium would incorporate retail uses fronting Atchison Street, commercial tenancies, landscaped communal areas, and pedestrian improvements along Mitchell Street. Vehicle access and loading would be consolidated via Atchison Lane.

Residents would have access to more than 665 sqm of communal indoor and outdoor spaces, while the development proposes 96 parking spaces across five basement levels.

The proposal also includes a commitment for 10 per cent of residential floor space to be allocated toward affordable housing through a monetary contribution.

COX said the tower form responds directly to the emerging high-density character of the precinct while seeking to maximise solar access, cross ventilation, and outlook from apartments.

<img alt="First look: SP Setia targets St Leonards skyline with 40-storey TOD tower" data-entity-type="file" data-entity-uuid="2163f85c-f63b-4be3-aafa-f8763976cec5" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Article%20Feature%20Image%20%28Grid%29_5.png?VersionId=WiAmtIKJ6.ZQ41EtYEQ1fol7AeorKBlL" />

“The building is orientated towards north,” the Apartment Design Guide compliance report noted, adding that the tower’s slim form was driven by the constrained inner-urban site dimensions.

The design also incorporates landscaped setbacks and communal open space at podium level, intended to soften the interface with surrounding streets and improve pedestrian amenity.

The project adds to a growing wave of redevelopment proposals reshaping St Leonards and Crows Nest following the opening of the Sydney Metro City line and the NSW Government’s push for higher-density housing around major transport nodes.

Last week Stockland filed plans just down the road. They want to build a <a href="https://www.apartments.com.au/new-apartments/601-pacific-highway-st-leonards-nsw-2065">52-storey tower on Pacific Highway</a>.

Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/first-look-stockland-plans-52-storey-538-apartment-st-leonards-tower">First look: Stockland plans 52-storey, 538-apartment St Leonards tower&nbsp;</a>

Joel Robinson

First look: SP Setia targets St Leonards skyline with 40-storey TOD tower

<a href="https://www.apartments.com.au/developers/urban-property-group">Urban Property Group</a> has revealed plans for a new mixed-use tower at 10 Dangar Street, Wickham, advancing a proposal that would reshape the southern gateway to Newcastle’s city centre with one of the city’s tallest residential buildings.

The State Significant Development proposal, now on exhibition, seeks approval for a <a href="https://www.apartments.com.au/new-apartments/bowline-10-dangar-street-wickham-nsw-2293">43-storey tower</a> immediately adjacent to the Newcastle Interchange. The project would deliver around 200 apartments, including 42 affordable housing dwellings, alongside 99 co-living units, a 171-room hotel, retail space, and new public domain integrated through the site.

The scheme marks a significant escalation of plans previously approved for the site. Urban Property Group took over the prominent 2,904 sqm parcel, where excavation and demolition had already commenced under an earlier consent for a 14-storey mixed-use development.

<img alt="First look: Urban Property Group unveils Newcastle’s next supertower at Wickham interchange" data-entity-type="file" data-entity-uuid="58a96dd9-407f-4d20-86b4-94e4bfeef74b" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/wickham%20podium.png?VersionId=LGlf08pdFGAZDzvx_CXC4XakHNZRuEE0" />

Designed by <a href="https://www.apartments.com.au/architects/sjb-architects">SJB</a>, the tower has been conceived as a landmark transit-oriented development anchored to the Newcastle Interchange precinct. The proposal includes 245 build-to-sell apartments across a mix of one, two, and three-bedroom residences, as well as two penthouses. Fifteen apartments and one operational unit are earmarked for NDIS housing. The co-living component would add a further 99 units, while the podium would accommodate retail uses and hotel facilities.

SJB said the site presents “a valuable opportunity to anchor the precinct by setting the standard for design, active ground planes and character at the key southern gateway.”

The architecture responds directly to the site’s position beside major transport infrastructure and within one of Newcastle’s fastest-evolving urban renewal precincts. The tower form sits above a sculpted podium designed to frame new public spaces, including a through-site pedestrian link connecting Station Street to Hannell Street, landscaped plazas, and activated retail edges.

<img alt="First look: Urban Property Group unveils Newcastle’s next supertower at Wickham interchange" data-entity-type="file" data-entity-uuid="a7bd6ff0-f7db-4ce8-a6dc-ea56e72c6149" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/wickham%20lanne.png?VersionId=xzf39VADyhj7zBQY2I9fx9vI62u2tuSb" />

The design report describes the project as part of the broader transition of Wickham into “a vibrant, high-quality mixed-use urban precinct” that leverages proximity to the station, open space, and regional connectivity.

A detailed public art strategy has also been prepared for the development. The strategy positions the project as “a transit-oriented development of state significance at the gateway to Newcastle’s city centre” and outlines a series of integrated artworks responding to Newcastle’s industrial and transport heritage.

Creative Road’s curatorial framework for the project, titled Unveil, draws on “stratified surfaces, carved volumes, and light-filled apertures” while referencing Newcastle’s transformation from an industrial city into a contemporary education and technology hub.

<img alt="First look: Urban Property Group unveils Newcastle’s next supertower at Wickham interchange" data-entity-type="file" data-entity-uuid="77a882bb-14b1-4d28-99ff-9438e39508c0" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/wickham%20site.png?VersionId=cevgo_vN0eKPK78P8YcEu3mKPLkpFqE7" />

The proposal is being advanced through the NSW Housing Delivery Authority pathway after being declared State Significant Development in June 2025. The accompanying scoping report states the development aims to “maximise the site’s proximity to the Newcastle Interchange by delivering transit-oriented development” while increasing housing supply and affordable housing provision within the Newcastle LGA.

Urban Property Group’s plans align with the long-term strategic vision established under the Wickham Master Plan, which identified the interchange precinct as suitable for substantial uplift in height and density. The current proposal would significantly intensify that vision, positioning the tower among the tallest developments proposed for Newcastle.

The site sits immediately north of the Newcastle Interchange, bounded by Dangar Street, Hannell Street, and Charles Street. It is surrounded by a rapidly growing cluster of residential towers and mixed-use projects that have emerged following the completion of the light rail and transport interchange.

First look: Urban Property Group unveils Newcastle’s latest tower at Wickham interchange

Bottega House has completed settlement of a landmark riverfront site in Macquarie Street, St Lucia, representing its first major Brisbane development.&nbsp;

Positioned on the banks of the Brisbane River, the <a href="https://www.apartments.com.au/new-apartments/180-macquarie-street-st-lucia-qld-4067">premium site at 180 Macquarie Street</a> features uninterrupted river frontage in one of Brisbane’s most tightly held residential precincts.&nbsp;

The proposed development, currently under assessment with Brisbane City Council, has been designed by <a href="https://www.apartments.com.au/architects/plus-studio">Plus Studio</a> with interiors by <a href="https://www.apartments.com.au/interior-designers/mim-design">Mim Design</a> and will deliver a boutique collection of premium residences positioned specifically for owner occupiers and downsizers.&nbsp;

The residences are set to redefine luxury apartment living in the area, with a focus on architectural quality, refined finishes, landscape integration and elevated amenities including curated wellness facilities, resort-style pools and recreation spaces rarely seen in the local market.&nbsp;

Exclusive sales for the project will be led by Keenan &amp; Byrne, ahead of an anticipated launch later this year.&nbsp;

Bottega House Managing Director Nick Malloch said the project reflects the group’s ambition to deliver a highly curated residential offering within one of Brisbane’s most tightly held precincts.&nbsp;

“This is an incredibly rare riverfront opportunity and one we have approached with a long-term perspective,” Malloch said.&nbsp;

“Our vision from the outset was to create a boutique collection of residences that feel more like private homes than traditional apartments, with generous proportions, refined finishes and exceptional amenity throughout."

Malloch says there is a&nbsp;lack of premium owner-occupier stock of this quality in the market, particularly for downsizers wanting space, privacy and a true lifestyle offering without compromise.&nbsp;

"Demand is expected to be strong given the scarcity of premium riverfront opportunities of this nature within Brisbane’s inner-west."&nbsp;

Bottega House secures landmark riverfront site in St Lucia 

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The arrival of the first piling rig officially marks the commencement of construction at SIERA’s new beachside apartment development, Exhale, in Northcliffe.

<a href="https://www.apartments.com.au/new-apartments/exhale-surfers-paradise-8-enderley-avenue-surfers-paradise-qld-4217">Exhale</a>, a glass-encased tower featuring 54 large-scale apartments at 8 Enderley Avenue, is SIERA’s third Gold Coast development. It follows the recently completed PIPIS Bilinga beachfront project, which achieved suburb-record prices, and the soon-to-be-completed Chevron Island development, Tapestry.

[smartcode_project:default project_id=112661 project_image_fid=359603]

<a href="https://www.apartments.com.au/developers/siera">SIERA</a> Founder and Managing Director Brent Thompson said the arrival of the piling rig represented a significant milestone for the development, which is scheduled for completion in late 2028.

Over the next month, around 260 piles are expected to be installed as work progresses on the basement structure. The building is anticipated to rise above ground level early next year, before unveiling its sculptural glass curtain wall, developed in collaboration with specialist façade engineers.

“The façade was designed to maximise panoramic coastal views while creating a distinctive architectural identity,” Thompson said.

[smartcode_project:default project_id=112661 project_image_fid=355935]

Designed by BDA Architecture, Exhale will comprise just 54 two- and three-bedroom residences across 26 levels, a level of low-density living rarely delivered in this beachside pocket between Surfers Paradise and Broadbeach.

The project has been conceived as a resident-only building, with no short-stay accommodation permitted. SIERA says the model is intended to appeal to long-term owner-occupiers rather than transient holiday demand.

[smartcode_project:default project_id=112661 project_image_fid=361052]

Residences have been designed with large-format layouts and expansive glazing, with most apartments featuring more than 30 metres of glass frontage to maximise natural light and ocean views.

The amenity offering spans two levels and centres on wellness and lifestyle, including a heated magnesium pool, sauna, yoga and Pilates studio, gymnasium, private dining facilities, cinema lounge, and dedicated surfcraft storage.

[smartcode_project:default project_id=112661 project_image_fid=359607]

More than half of the apartments have already sold. SIERA has also opened a sales gallery for Exhale at its Chevron Island commercial premises, near its Tapestry tower and the site of its second Chevron Island apartment development, which is slated to launch in early 2027.
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[smartcode_project_cta:default project_id=112661]

SIERA kicks off construction at Northcliffe tower Exhale

Local Little Bay residents, along with buyers from premium postcodes across Sydney’s affluent Eastern Suburbs, have dominated purchases in developer-builder Urban Property Group’s first Eastern Suburbs apartment development, <a href="https://www.apartments.com.au/new-apartments/este-little-bay-jennifer-street-little-bay-nsw-2036">ESTE Little Bay</a>.

The $250 million coastal project, one of the first new developments in the area in several years, has proven particularly popular with downsizers, especially those from Coogee and Bondi. One Double Bay downsizer paid $4.7 million for a four-bedroom penthouse, setting a new local apartment price record in the process.

Buyers have been attracted to the combination of coastal tranquillity, premium design and amenity-rich neighbourhood living. The walkable village setting, along with proximity to three of Sydney’s leading golf courses, New South Wales Golf Club, St Michael’s Golf Club and The Coast Golf Club, has also been a key drawcard.

[smartcode_project:default project_id=112343 project_image_fid=352689]

Built across two low-rise buildings designed by <a href="https://www.apartments.com.au/architects/hill-thalis-architecture-urban-projects-pty-ltd">Hill Thalis</a> and set along a lush, landscaped green spine, designed by leading landscape architect <a href="https://www.apartments.com.au/landscape-architect/arcadia-landscape-architecture">Arcadia</a>, ESTE Little Bay offers a collection of one, two, three and four-bedroom residences with interiors by Richards Stanisich.

<a href="https://www.apartments.com.au/developers/urban-property-group">Urban Property Group</a> Sales Director, Tom McIvor said the response to ESTE has been "nothing short of extraordinary."

“Buyers have been quick to recognise ESTE as a rare opportunity to invest in a coastal sanctuary that offers both seclusion and connectivity to the heart of Sydney,” McIvor said.

[smartcode_project:default project_id=112343 project_image_fid=352687]

<a href="https://www.apartments.com.au/project-marketer/srm-residential">SRM Residential</a> Senior Director, <a href="https://www.apartments.com.au/project-marketer/srm-residential">Clayton Ross</a> said the local market has responded incredibly well, driven by ESTE’s exceptional location and the rarity it offers.

“We’ve seen strong interest from a variety of buyer groups, all of whom are drawn to the exclusivity and quality of the build and construction by the 4.5-star iCIRT-rated builder / developer, Urban Property Group. There’s truly nothing else like it along Sydney’s coastline.”

[smartcode_project:default project_id=112343 project_image_fid=352690]

The project also includes robust buyer protections, including Resilience Insurance’s Latent Defects Insurance, providing 10 years of structural cover, and an independent iCIRT-rating of the developer.

“The iCIRT-rating adds another layer of confidence,” Ross added. “Buyers see it as a safeguard for their investment and their lifestyle.” A highlight of ESTE’s offering is its exclusive wellness amenities, including a heated rooftop infinity pool and outdoor heated spa, a state-of-the-art Technogym fitness centre, and a sauna.

<a href="https://www.apartments.com.au/new-apartments/este-little-bay-jennifer-street-little-bay-nsw-2036">ESTE Little Bay</a> is topped out and is on track to complete towards the end of 2026, with residents moving in before Christmas.

[smartcode_project_cta:default project_id=112343]

Eastern Suburbs buyers snap up ESTE Little Bay apartments

Property Crash

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Commentator Alan Kohler says property doesn’t look like it will crash and the feared bubble is yesterday’s scare story after the interventions of APRA’s Wayne Byres between 2014 and 2017.
But the Australian newspaper columnist still says there is still time for a crash, "but so far so good, and at this stage it doesn’t look like happening."
He suggests all the bubble talk is about bitcoins and cryptocurrencies so the housing bubble is yesterday’s scare story. "The Australian housing bubble, so derided around the world and feared here, is having a soft landing," he wrote.
Kohler says Byers, the chairman of the Australian Prudential Regulation Authority can take much of the credit for "gently taking the air out of what was looking a pretty stretched balloon."
He started just a few months after taking over as chairman of APRA, with letters to the banks in December 2014 effectively firing a shot across the bows. The press release at the time advised it was watching especially property investor lending above 10 per cent growth and increases in high loan-to-value ratio (LVR) loans. Its other significant intervention in more recent times was on onterest-only lending which was restricted to 30 per cent of new loans, and only if LVRs were above 80 per cent, growth in investor lending had to be below 10 per cent. Kohler says APRA was forced into this because the RBA felt unable to raise interest rates to lean into the housing boom. "It must be acknowledged that APRA’s interventions over the past two years were exquisitely timed and directed — in effect APRA produced a much more targeted monetary policy than the RBA ever could." "Whereas RBA rate moves affect everyone and all rates, APRA was able to specifically increase interest rates for investor and higher risk loans only, and leave owner-occupier mortgage rates where they were, simply by leaning on the banks to restrict investor lending."
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APRA looks to have saved Australia from a housing crash in 2018: Alan Kohler

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Perth bargains are harder to find, according to the valuation firm, Herron Todd White.
"All in all, the market is ripe for owner occupiers to make a purchasing decision," a recent report to clients advised.
"Many speculators have already called the bottom of the market and they may well be right – just not in all areas.
"Many areas remain price sensitive, but the ability to snag a bargain is becoming harder by the week," it suggested.
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"There are definite signs things are changing.
"Discussions with selling agents reveal more frequent incidents of multiple offers on properties and a higher level of open home attendance at lower price levels.
"The number of properties advertised for sale has declined over the previous 12 months, from 14,000 to 13,200 – with the market commonly interpreting 12,000 as a balanced market.
"Given that in an average week, 500 sales are recorded in the Perth metro area, a short period of undersupply could lead to a market correction in a very short period of time," it suggested.
The market appears to be at the stage of understanding that the window of opportunity to pick the bottom of the market is narrowing, with a level of optimism becoming apparent.
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Perth property bargains harder to find: HTW

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The Sydney apartment market was now suffering serious falls in certain locations, according to The Australian columnist Robert Gottliebsen.
He said Sydney's building rate for apartments in the city was set to fall by at least 50 per cent which will have a severe downward flow on to economic activity in Australia’s biggest city.
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He tips the big banks will be reporting a significant rise in their problem loans — particularly if global interest rates rise on the back of US tax cuts, though not in the current reporting season.
He says the level of apartment decline is much greater than most were predicting three to six months ago.
The repercussions will quickly spread to Melbourne, although the blows may not be as severe because apartments are much cheaper.
"Brisbane is already in trouble so may be insulated from further big falls," he wrote."
"Those looking for a fall in Sydney dwelling prices will be cracking the champagne today but unfortunately the repercussions will be nasty so the celebrations may be short lived," he added.
"If you want a headline figure, apartments sold as used apartments in the big Sydney apartment estates have fallen by at least 20 per cent.
"The fall rate for individual sales can rise to 25 per cent," although no further details were given.
"However the price fall in new apartments bought either off the plan or as the developer sells a completed apartment are down in the vicinity of 12 per cent."
He blames fewer deductions from depreciation for the gap.
"Very quietly in the last budget, Treasurer Scott Morrison stopped the deduction of depreciation on used apartments from July 1, 2017.
"That means that for an investor, a used apartment is now worth substantially less than a new apartment — hence the 20 to 25 per cent price fall which is greater than the new apartment decline."
He says the 20 to 25 per cent fall in used near city apartment prices will not be duplicated across the Sydney dwelling market "but auction clearance rates will stay low or fall back and many areas will be soft."
Gottliebsen concluded his article series with the claim the "most dangerous people" are real estate agents "who will be spruiking that there is no crisis and regulators who don’t understand the power of what they have unleashed."
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Gottliebsen says some Sydney unit prices have fallen 25 percent as market has cracked

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Treasurer Scott Morrison has reassured US investors – and Australian mums and dads – that Australia is not heading towards any housing market crash.
He noted house prices were high but their value was still "real".
<a href="https://sjm.ministers.treasury.gov.au/speech/025-2017/" target="_blank">In a speech in New York to investors overnight</a>, Mr Morrison pushed back at a recent warning from the International Monetary Fund about particularly high levels of household debt in Australia.
He pointed to a series of measures taken by prudential regulator APRA to constrain access to credit.
"The rise in housing values has been driven principally by genuine economic forces of supply and demand, where mortgages are subject to full recourse finance, supported by a strong, stable and resilient banking system and world's best practice credit standards.
"Low or no doc loans that crippled US housing markets are a rarity in Australia."
Morrison acknowledged household debt in Australia was high, with about 80 per cent of Australia's $2.1 trillion in household debt tied up in mortgages.
"This is a real risk, if not properly managed, and we get it", but added the figures needed context.
"While Australia's housing markets, especially in our largest cities, have experienced strong growth over the past decade this, of itself, is not evidence of an underlying weakness in housing asset values, nor that a hard landing for our housing markets is ahead," he said.
"Australian housing values, while high, are still real. 'Safe as houses' still broadly means something in Australia."
He noted the two occasions when we have seen considerable price pressures in homes in the last decade have both coincided with periods when the construction of new homes simply wasn't keeping up with population growth.
"In the last four years, supply has moved ahead of population to now build the strongest cumulative growth in stock in 25 years.
"This increase in stock is now working its way through the backlog, and there remains a strong pipeline going forward.
"In this year's Budget I announced additional measures to ensure supply keeps up with demand in the future, and am now working with our provincial Governments to improve the responsiveness and forward planning of the zoning and regulatory approvals system.
"This includes providing tax incentives for affordable housing investment, through managed investment trusts, that would be of real interest to US pension funds, providing a fifty percent withholding tax reduction from 30 per cent to 15 per cent for such investments, including development projects."
He noted as observed by Moody's in their credit report last month, when they once again maintained Australia's AAA credit rating, APRA's "proactive prudential policies bolster the resilience of the banking sector" and mitigate the risks of high household debt.
"And the proof, as always, is in the pudding."
Citing capital city house prices only rose 0.3 per cent in September to be 8.5 per cent higher through the year, he said APRA's measures, which have the full support of the government, are working to smooth the landing in our housing markets.
Morrison has visited New York and Washington for meetings at the IMF, the World Bank and of G20 Finance ministers.
 
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jonathanchancellor-7SQnKwU6yx

No low-doc helps ensure no housing market crash, says Treasurer Scott Morrison

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While a property market crash and its impact on the Australian economy is a topic of hot debate, some experts say a slump in consumer spending is a more immediate threat to the economy.
The view comes in the wake of the latest ABC Four Corners show which noted that “for every $1 earned, on average, Australians have nearly $2 of debt” and it stems from a national obsession with buy property.
Household debt hit a record high of 190 per cent of yearly disposable income in the March quarter, according to the Reserve Bank.
Show presenter Sarah Ferguson said the programme would explore “what happens if Australia’s debt-fuelled housing boom comes to a crashing end”.
Two of the interviewees, Roy Palleson and Rowena Ebona, a Sydney couple on a combined income of $135,000, said they owed $1.2 million on five investment properties worth $1.5 million.
A fall in property prices would leave Roy and Rowena, and thousands of other investors, holding more in mortgage debt than they owned in property, with little or no buffer.
However, University of New South Wales economist Richard Holden said a drop in consumer spending was a more immediate concern.
“If you have more of a drop on consumer spending, you’re going to see a contraction on the business side. It flows straight into business investment and business expansion, and that has a multiplier effect,” he told The New Daily.
“They’re not going to be in the mood to give big pay rises or wage rises at all. They’re not going to be employing people and so that then compounds on the consumer side. It just goes round in a vicious circle.”
The latest GDP figures from the March quarter reveals that the share of economic growth flowing to wage earners fell to 51.5 per cent, the lowest since 1964.
Household consumption currently accounts for about 57 per cent of GDP and any drop in consumer spending from cash-poor workers would hit growth.
The economy only grew by 0.4 per cent in the March quarter.
The widely-cited consumer confidence index compiled by Roy Morgan has fallen for the past three weeks. The latest ‘confidence’ rating fell to 109.2 points on August 20, down from 118.4 on July 30.
Dr Holden also says that there are far more factors – such as state and federal stimulus – propping up house prices than those aimed at boosting consumer spending and wage growth.
“It’s been well discussed what is propping up the property side, with negative gearing and things like that,” he said.
“On the consumer side, when you’ve got high personal income tax rates and not much talk of cuts to those, that’s not going to help consumer spending. And then of course wage growth has been really low and stagnant.”
“We learned last week that wages grew in 2016-17 by just 1.9 per cent, the lowest of any financial year since at least 1997, and exactly the same speed as inflation. This meant wages are failing to outpace the cost of living.”
Wages in the private sector grew just 1.8 per cent over the fiscal year, meaning the majority of the workforce actually copped a wage cut in real terms, he said.
Meanwhile, property prices continue to be resilient in spite of regulatory measures.
Brendan Coates, a fellow at the Grattan Institute, said the bigger risk “at the moment” from the property market was a drop in household consumption.
“If households found themselves in difficulty with servicing their debts, the more likely scenario would be that they curb their spending in order to meet their obligations, to keep repaying those debts,” he was cited as saying by The New Daily.
He pointed to RBA research that found that the spending of households on variable-rate mortgages was very sensitive to changes in interest rates.
The effects would likely reverberate through the economy, especially the labour market, he said.
“If you have households reducing their spending, that slows income growth through the economy, which presents risks for unemployment,” he said.
“If households are not confident in where things are going, they won’t spend as much and that will have flow-on impacts to other sectors and other industries.”
An example of how this might hurt the economy is the recent warning from G8 Education, the Gold Coast-based childcare centre operator, that sluggish wages growth had contributed to a drop in demand for childcare, cutting into its revenue.
Even without such a consumer-led crisis, Coates said record-low wage growth and low inflation meant mortgage debt would “loom larger for much longer”, instead of being eroded away.
 
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Anaemic consumer spending bigger threat than property crash: Experts

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Standard &amp; Poor's has placed 25 second tier Australian banks, insurers and buildings societies on negative watch as it becomes concerned about rising household debt and property values.
The change in ratings comes as the agency adjusted its assessment of Australia's economic risk trends from stable to negative. 
While S&amp;P said that growth in debt and property prices would likely moderate, there was a one in three chance that the strong growth would continue, leading to increased risks of a sharp correction that would hurt lenders. 
Among the largest institutions impacted are AMP Bank, Bank of Queensland, Bendigo and Adelaide Bank, Macquarie whose current ratings were placed on negative outlook.
Several other building societies and regional lenders such as Cuscal and CUA also had their ratings outlook revised to negative.  
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<div>The ratings outlooks of the major banks had already been placed on negative outlook because of the action taken on the AAA Australian sovereign rating.</div>
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<div>S&amp;P said that private sector debt as a percentage of GDP had grown to 139 per cent  to 118 per cent in 2012, an average increase of 5.2 per cent while property prices had increased by 5.3 per cent, after adjusting for inflation.   </div>
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"Strong growth in private sector debt (to about 139 per cent of GDP in June 2016 from 118 per cent in 2012, or an annual average increase of 5.2 percentage points) coupled with an increase in property prices nationally (average inflation-adjusted increase for the past four years was 5.3 per cent nationally) are driving the potential increase in imbalances in the economy, in our view.
"Consequently, we believe the risks of a sharp correction in property prices could increase and if that were to occur, credit losses incurred by all financial institutions operating in Australia are likely to be significantly greater; with about two-thirds of banks' lending assets secured by residential home loans--the impact of such a scenario on financial institutions would be amplified by the Australian economy's external weaknesses, in particular its persistent current account deficits and high level of external debt."
The impact of any sharp drop in property prices would be greater on banks, because more than 60 per cent of their loans were for residential property, it said.
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jchancellor-FAypfDUnLy

One in three chance of strong growth triggering sharp correction in property: S&P

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The property market may be in for a hard landing as early has 2017, according to investment bank Morgan Stanley’s recent predictions.
The reasons cited are a soft rental market, an oversupply of new apartments and worsening affordability, says an article in the Australian Financial Review based on Morgan Stanley’s outlook.
It predicts apartment approvals to fall by more than half over the next two years as settlement risks and a sharp cut in development financing hurts developers.
"In short, we believe the growth contribution from the housing boom has already peaked and look for a plateau over 2017 and decline through 2018," strategists Daniel Blake, Steven Ye, Chris Nicol and Antony Conte write.
"New apartment projects should slow sharply as focus turns to settlement of the existing pipeline."
The outlook is based on more pessimistic expectations about net migration rates than others, according to Morgan Stanley, and is the result of a new index  — MSHAUS — combining six factors including oversupply, rental vacancy rates that could rise to 4.5 percent from 3 percent in two years, tighter lending standards and lower expected growth in home values.
The index is in a range close to its lowest level since 2004, says the report. 
<a href="/images/2016/10/21/MorganStanley.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2016/10/21/MorganStanley.jpg" alt="">
"A growing overbuild, deteriorating rental market conditions, further worsening in housing accessibility, tighter credit supply and more subdued price expectations all suggest a further softening in the outlook over 2017," it says.
Planning approvals of apartments, townhouses and semi-detached homes will fall to 57,000 in the fourth quarter of 2018 from 124,000 in trend terms in July this year, the report says. 
Settlement risk – both for individual buyers and whole developments – is a major concern. 
"In our view, the greatest vulnerability is settlement risk on the 160,000 apartments that we forecast completing through end 2017," the report says. "Listed developers report low failure rates currently, but also confirm credit availability has tightened, especially for foreign investors."
It also applies to buildings, despite the growth of alternative financing sources. 
The report says the nearly $120 billion in settlements due by end-2018 makes this a genuine concern.
The rental market is also the softest since 2003, it says. 
"We think they will weaken further, on the back of an increasing apartment overbuild. Rent inflation has already slowed sharply and is running at a record low of 0.9 percent, year on year."
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Housing boom to decline through 2018 as soft rental market, oversupply bite: Morgan Stanley

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Finance commentator and Channel 7's Sunrise breakfast host, David Koch has offered six signs which show the housing market could be about to change.
"The recent Reserve Board minutes showed it was quite comfortable with the state of the property market," he told the Telegraph.
"Some international commentators however are predicting an imminent crash in values."
He said that rather than speculate, the more important thing is to understand the major signals which could points to a change in the property market.
1. Rising interest rates
"Borrowing money has never been cheaper," David says.
Record low interest rates have meant property buyers have been borrowing more for less.
But this period of easy money can lead to a financially deadly "debt trap" for those who overdo it.
A rise in interest rates on a four percent home loan doesn't sound much until you realise it would mean a 50 percent jump in repayments.
2. Rising unemployment 
With 25 consecutive years of positive economic growth, the job market has been pretty solid and unemployment has been relatively low.
That has been good news for the property market because stable employment gives buyers the confidence to get into the market or trade up.
If the economy slows, the job market deteriorates, unemployment rises, incomes become uncertain, confidence falls and property prices suffer.
3. Falling auction clearance rates
Auction clearance rates are a regular, consistent barometer of a property market health.
It's an indicator on the balance between buyers and sellers, which is the fundamental supply and demand foundation of all property markets.
The higher the clearance rate, the healthier the market as it indicates there are plenty of buyers competing for stock on the market. 
4. Rising vacancy rates
Investors buy property for both capital growth and income from rents.
The key to making an investment property stack up financially is they must have tenants paying rent.
Rising property vacancy rates means there aren't enough tenants to go around so investors will either have to slash their rents to attract tenants or sell the property.
5. Falling rental yields
Linked to increasing rental vacancy rates.
A property is valued on the rental income it can produce and its capital growth prospects from rising values.
If vacancy rates rise, landlords will have to lower their rents to attract tenants or the property will be vacant and earn no income.
6. Above-average construction numbers
 Property is about demand and supply.
If construction outstrips demand then values will fall as sellers compete to attract buyers.
That's the current concern about the Melbourne, Sydney and Brisbane inner-city home unit market.
A huge amount of construction is under way and there are fears that when these developments are finished, there will be an oversupply and values will fall.
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Six signs to look for if a property crash is on the way: David Koch

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GUEST OBSERVER
To modify Benjamin Franklin, it seems that in Australia nothing can be said to be certain, except death, taxes and endless debate about property prices.
Why is it so unaffordable? Are foreigners to blame? Is it a good investment? Is negative gearing the problem? Are property prices about to crash?
Worries about a property crash have been common since early last decade. In 2004, The Economist magazine described Australia as “America’s ugly sister” thanks in part to a “borrowing binge” and soaring property prices which had seen it become “another hotbed of irrational exuberance”. At the same time the OECD estimated Australian house prices were 51.8% overvalued.
Since the GFC, predictions of an imminent property crash have become more common with talk that a property crash will also crash the banks and the economy.
Our view since around 2003 has been that overvaluation and high levels of household debt leave the housing market vulnerable. As such it could be seen as Australia’s Achilles heel. However, in the absence of a trigger it’s been hard to see a property crash as a base case. Not much has really changed.
This note takes a look at the key issues and what it means for investors.
Overvalued, over loved and over indebted
The two basic problems with Australian housing are that it is expensive and household debt is high. Overvaluation is evident in numerous indicators:
According to the 2016 Demographia Housing Affordability Survey the median multiple of house prices in cities over 1 million people to household income is 6.4 times in Australia versus 3.7 in the US and 4.6 in the UK. In Sydney it’s 12.2 times and Melbourne is 9.7 times.
The ratios of house prices to incomes and rents are at the high end of OECD countries and have been since 2003.
Real house prices have been above trend since 2003.
<a href="/images/2016/03/10/Screen%20Shot%202016-03-10%20at%2011.21.21%20AM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/03/10/Screen%20Shot%202016-03-10%20at%2011.21.21%20AM.png" alt="">
 
The shift to overvaluation more than a decade ago went hand in hand with a surge in the ratio of household debt to income, which took Australia’s debt to income ratio from the low end of OECD countries to now being around the top.
<a href="/images/2016/03/10/Screen%20Shot%202016-03-10%20at%2011.25.17%20AM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/03/10/Screen%20Shot%202016-03-10%20at%2011.25.17%20AM.png" alt="" width="793" height="460">
 
Overvaluation and high household debt are central elements of claims that Australian house prices will crash. These concerns get magnified whenever there is a cyclical surge in prices as we have seen recently in Sydney and Melbourne.
But a crash seems elusive.
However, given the regularity with which crash calls for Australian property have been made over the last decade and their failure to eventuate, it’s clear it’s not as simple as it looks.
First, the main reason for the persistent "overvaluation" of Australian home prices relative to other countries is constrained supply. Until recently Australia had a chronic under supply of over 100,000 dwellings, as can be seen in the next chart that tracks housing completions versus underlying demand.
Completions are at record levels but they are just catching up with the undersupply of prior years.
<a href="/images/2016/03/10/Screen%20Shot%202016-03-10%20at%2011.27.01%20AM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/03/10/Screen%20Shot%202016-03-10%20at%2011.27.01%20AM.png" alt="">
 
Secondly, Australia has not seen anything like the deterioration in lending standards other countries saw prior to the GFC. There has been no growth in so-called low doc and sub-prime loans which were central to the US housing crisis. In fact in recent years there has been a decline in low doc loans and a reduction in loans with high loan to valuation ratios. See the next chart. And much of the increase in debt has gone to older, wealthier Australians, who are better able to service their loans.
<a href="/images/2016/03/10/Screen%20Shot%202016-03-10%20at%2011.28.32%20AM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/03/10/Screen%20Shot%202016-03-10%20at%2011.28.32%20AM.png" alt="">
 
Third, and related to this, there are no significant signs of mortgage stress. Debt interest payments relative to income are low thanks to low interest rates. See the next chart.
<a href="/images/2016/03/10/Screen%20Shot%202016-03-10%20at%2011.29.34%20AM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/03/10/Screen%20Shot%202016-03-10%20at%2011.29.34%20AM.png" alt="">
By contrast in the US prior to the GFC interest rates were starting to rise. Yet in Australia bad debts and arrears are low.
While new loan sizes have increased, Australians seem focussed on cutting their debt once they get it.
Finally, while some seem to think that because property prices in mining towns like Karatha are now crashing this is a sign that other cities will follow. This is non-sensensical. Property prices in mining towns surged thanks to a population influx that flowed from the mining boom. This is now reversing. Perth and Darwin are also being affected by this but to a less degree. By contrast the surge in property prices in cities like Sydney and Melbourne that occurred into early last decade predated the mining boom and their latest gains largely occurred because the end of the mining boom allowed lower interest rates.
The current state of play
Our assessment is that the boom in Sydney and Melbourne is slowing thanks in large part to APRA’s measures to slow lending to property investors. However, house price growth is likely to remain positive this year. Price growth is likely to remain negative in Perth and Darwin as the mining boom continues to unwind. Hobart &amp; Adelaide are likely to see continued moderate property growth, but Brisbane may pick up a bit.
Nationwide price falls are unlikely until the RBA starts to raise interest rates and this is unlikely before 2017. And then in the absence of a recession or rapid interest rate hikes price falls are more likely to be 5-10% as was seen in the 2009 and 2011 down cycles rather than anything worse.
<a href="/images/2016/03/10/Screen%20Shot%202016-03-10%20at%2011.31.43%20AM.png" target="_blank"> Click to enlarge</a>
<img src="/images/2016/03/10/Screen%20Shot%202016-03-10%20at%2011.31.43%20AM.png" alt="">
 
What to watch for a property crash?
To see a property crash – say a 20% average fall or more – we probably need to see one or more of the following:
A recession – much higher unemployment could clearly cause debt servicing problems. At this stage a recession looks unlikely though.
A surge in interest rates – but the RBA is not stupid; it knows households are now more sensitive to higher rates.
Property oversupply – this is a risk but would require the current construction boom to continue for several years.
Implications for investors
There are several implications for investors:
While housing has a long term role to play in investment portfolios it is looking somewhat less attractive as a medium term investment. It is expensive, offers very low income (rental) yields compared to all other assets except bank deposits and Government bonds and it’s vulnerable to possible changes to taxation arrangements around property.
There are pockets of value, eg in regional areas. You just have to look for them.
As Australians already have a high exposure to residential property (directly and via bank shares and property trusts), there is a case to maintain a decent exposure to say unhedged global shares because it could provide an offset if it turns out I am wrong and the Australian property market does have a crash.
<a href="https://www.propertyobserver.com.au/https://plus.google.com/110172465327488162875?rel=author" target="_blank">SHANE OLIVER</a> is head of investment strategy and economics and chief economist at <a href="https://www.ampcapital.com.au/home" target="_blank">AMP Capital</a> and is responsible for AMP Capital's diversified investment funds.
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