A landmark former orphanage site in Surrey Hills could be transformed into a new residential community under plans lodged by <a href="https://www.apartments.com.au/developers/antipodean-land-developments">Antipodean Land Developments</a> that would deliver 76 apartments and townhouses while restoring some of the suburb's most significant heritage buildings.

The burgeoninng Melbourne-based developer has submitted plans for the 9,158 sqm site at 1 Kent Road and 24 Durham Road, home to the former St Joseph's Home for Destitute Children, a historic institutional complex dating back to the late 19th century. The proposal seeks to adaptively reuse several heritage buildings while introducing two new four-storey residential buildings set within extensive landscaped grounds.

Designed by <a href="https://www.apartments.com.au/architects/woods-bagot">Woods Bagot</a> and Kerstin Thompson Architects, the project has been conceived as a contemporary residential village embedded within a restored heritage precinct. The development team describes the design approach as "The Village in the Garden," with new buildings positioned among mature landscaping by OCULUS and significant heritage structures.

<img alt="First look: Antipodean Land Developments plans heritage-led apartment community in Surrey Hills" data-entity-type="file" data-entity-uuid="44ec8c1b-c0b6-44ae-859e-5811b3e6a023" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Untitled%20design%20%281%29.png?VersionId=p.p1_KFh4iQoV4nisdnPfQBAsWNi7m79" />

The proposal would deliver 76 dwellings comprising a mix of apartments and duplex-style residences, significantly increasing housing supply on one of the largest privately held residential landholdings in Surrey Hills. The development includes 127 car spaces, 24 bicycle spaces and more than 1,000 sqm of communal amenity, with the existing chapel building earmarked for conversion into resident facilities.

According to the planning submission, the project centres on the restoration and adaptive reuse of the site's most significant heritage assets, including the original c.1889 St Joseph's building, the chapel designed by architect Augustus Andrew Fritsch, and the historic brick perimeter walls and entry gates. The proposal also incorporates the retention of other contributory buildings including the former infirmary and school building.

Tract Consultants, in the planning report accompanying the application, said the scheme had been shaped through extensive heritage analysis and design development.

"The shared vision for the Site by the project team has culminated in a scheme which successfully breathes life back into a historic site while delivering upon the objectives of Victoria's Housing Statement in a carefully curated and contextually responsive manner."

<img alt="First look: Antipodean Land Developments plans heritage-led apartment community in Surrey Hills" data-entity-type="file" data-entity-uuid="7263b7d8-95ea-400f-9531-6ca7d22c3c33" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Untitled%20design%20%282%29.png?VersionId=4cR1tiWOsDpgxEOwZi5vVFcyvvOsYkIE" />

The proposal is being assessed under Victoria's Significant Residential Development with Affordable Housing pathway. As part of the application, three per cent of the project's residential development cost would be contributed to the Social Housing Growth Fund. The development would also provide a diverse mix of one, two and three-bedroom residences targeting a broader range of buyers than typically found in Surrey Hills' detached housing market.

Sustainability initiatives include an anticipated 66 per cent BESS score, natural cross-ventilation to 80 per cent of apartments, 28 per cent deep soil landscaping and a canopy cover outcome exceeding local planning requirements. The proposal also sets aside more than 1,083 sqm for communal indoor and outdoor resident amenity spaces.

<img alt="First look: Antipodean Land Developments plans heritage-led apartment community in Surrey Hills" data-entity-type="file" data-entity-uuid="33fad46f-fe26-4d0a-acfd-6b776e1c6a3d" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Untitled%20design.png?VersionId=D9F6WVSyYCtGvSUmith35LRp6R7PQkw_" />

Planning documents describe the property as one of the largest underutilised residential sites in Surrey Hills, arguing it presents a rare opportunity to introduce "missing middle" housing in an established inner-eastern suburb while preserving and revitalising a significant heritage precinct.

Antipodean Land Developments has built a reputation for design-focused residential projects across Melbourne, particularly in the medium-density sector. Previous developments include Neighbourhood in Brunswick East, delivered with Breathe Architecture, and Balfe Park Lane, designed by Kerstin Thompson Architects.

They've been very active in site acquisition as they build out their future development pipeline. They recently launched Thornubury House, 45 apartments above a mix of commercial, retail, and food and beverage tenancies, and have plans for a boutique project in Fitzroy and another <a href="https://www.apartments.com.au/news/vic/antipodean-plan-apartments-for-deepdenes-missing-middle-on-whitehorse-road">"missing middle" project</a> on Deepdene's Whitehorse Road.

Joel Robinson

First look: Antipodean Land Developments plans heritage-led apartment community in Surrey Hills

Developer <a href="https://www.apartments.com.au/developers/auyin-property-development">Auyin</a> is the latest to turn to the Victorian Government's Development Facilitation Program in an effort to secure approval for its long-planned, mixed-use project in Elsternwick.

In 2018, Auyin lodged plans with Glen Eira City Council for a 14-storey building, however Council approved a reduced eight-storey scheme. A subsequent VCAT appeal in 2019 upheld the eight-storey height limit.

The project was later amended to nine storeys, but Auyin is now seeking to revive something closer to its original vision. The developer argues that the planning context has evolved significantly over the past decade, particularly within the Elsternwick Activity Centre, where higher-density development has increasingly been encouraged along Glen Huntly Road.

The proposal would transform the 1,239 sqm site at <a href="https://www.apartments.com.au/new-apartments/7-12-horne-street-elsternwick-vic-3185">7-15 Horne Street</a>, opposite Elsternwick Railway Station, into a 13-storey residential and retail development designed by CBG Architects, with 40 apartments

The site currently comprises three commercial properties.

<img alt="First look: 13-storey mixed-use tower planned for Elsternwick activity centre" data-entity-type="file" data-entity-uuid="5f465dd4-509b-4082-a669-0253b313914b" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/elsternwick%20podium.png?VersionId=72frWi0SmQ5AVJ3ARRhX5ILUYObhTm7x" />

The proposed apartment mix comprises 25 two-bedroom and 15 three-bedroom residences above 200 sqm of retail space at ground level. Residents would have access to a 90 sqm wellness facility, a 351 sqm communal indoor and outdoor terrace on the third level, and extensive landscaped areas throughout the development. A publicly accessible 135 sqm plaza would be created on the north-east corner of the site, providing seating, landscaping, and a new gathering space adjoining Horne Street.

The design adopts a four-storey podium that references the finer-grain character of the surrounding streetscape, with the upper tower recessed behind generous setbacks on all boundaries.

<img alt="First look: 13-storey mixed-use tower planned for Elsternwick activity centre" data-entity-type="file" data-entity-uuid="e637e763-2abc-4c34-a0aa-5c7ad36fae18" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/elsternwick%20open.png?VersionId=J1AoOpZgTyaF.KeeFSX6lMjEScX8KKRi" />

A key element of the proposal is the reconfiguration and widening of the surrounding laneways. Vehicle access would be retained from Lois Lane, with upgraded pedestrian connections linking Ross Street and Horne Street. The development would provide 58 residential car spaces, two retail car spaces, and 52 bicycle spaces across two basement levels and ground-floor facilities.

Architecturally, the building draws inspiration from the established character of Elsternwick Village. The façade combines dark charcoal brickwork, textured concrete, bronze-toned metal detailing, and extensive planting integrated into podium and tower levels. The design also incorporates a chamfered corner treatment and publicly accessible plaza intended to strengthen pedestrian activity around the station precinct.

Elsternwick's last new development completion was&nbsp;EVA Elsternwick by Pitard late last year. <a href="https://www.apartments.com.au/developers/milieu-property">Milieu</a> is working away on its nature-led neighbourhood, <a href="https://www.apartments.com.au/new-apartments/elsternwick-gardens-by-milieu-8-gordon-street-elsternwick-vic-3185">Elsternwick Gardens</a>, on Gordon Street, with its first stage expected to complete next year.

First look: Auyin seeks mixed-use apartment project in growing Elsternwick Activity Centre

<a href="https://www.apartments.com.au/new-apartments/otium-parkdale-123-125-como-parade-east-parkdale-vic-3195">Otium Parkdale</a>, the 13-residence boutique development by&nbsp;<a href="https://www.apartments.com.au/developers/huxtable-property">Huxtable Property</a>, has entered its final stages of delivery, with completion expected within the coming month and more than half of the residences sold.

The Como Parade East project is nearing the finish line at a time when opportunities to purchase new apartments in <a href="https://www.apartments.com.au/developments/parkdale-vic-3195">Parkdale</a> remain exceptionally limited. Fewer than 10 per cent of dwellings in the bayside suburb are apartments, making developments like Otium a relatively rare addition to a market traditionally dominated by detached housing.

[smartcode_project:default project_id=134974 project_image_fid=5427]

The three-level development comprises 13 residences, including ten two-bedroom apartments and three larger three-bedroom homes, all positioned above a secure basement car park.

Designed by <a href="https://www.apartments.com.au/architects/almeida-architects">Almeida Architects</a> with a strong connection to its coastal surroundings, Otium combines red brick, exposed concrete and dark metal detailing with integrated landscaping and greenery. Expansive glazing, generous balconies and terraces have been incorporated throughout the design to maximise natural light and reinforce indoor-outdoor living.

Inside, the residences feature engineered European oak flooring, natural and reconstituted stone benchtops, Bosch kitchen appliances, ducted heating and cooling, lift access and secure entry systems. The larger three-bedroom residences on the upper level have been designed with house-like proportions, while the two-bedroom apartments prioritise functionality, flexibility and low-maintenance living.

[smartcode_project:default project_id=134974 project_image_fid=5421]

The project is now in its final stages, with <a href="https://www.apartments.com.au/builders/labco">Labco</a> completing the remaining landscaping and external finishing works following the completion of the residences' interiors.

Otium's location within the heart of Parkdale continues to underpin its appeal. Residents will be just steps from local cafés, restaurants, shops and the newly elevated Parkdale Station, while the beach is less than a kilometre away.

With the project tracking ahead of schedule, buyers can currently secure a residence with a five per cent deposit and benefit from settlement terms of up to eight months. The advanced stage of construction also provides buyers with the opportunity to walk through the near-complete residences and experience the quality and finishes firsthand ahead of completion.

[smartcode_project_cta:default project_id=134974]

Otium Parkdale enters final month before completion as rare apartment opportunity nears sellout

A new boutique apartment development is entering the market in <a href="https://www.apartments.com.au/developments/chermside-qld-4032">Chermside</a>, with Brisbane-based developer <a href="https://www.apartments.com.au/developers/ausdev">Ausdev</a> bringing 33 residences to a well-connected pocket of Brisbane's north.

<a href="https://www.apartments.com.au/new-apartments/parkdrive-apartments-chermside-25-sammells-drive-chermside-qld-4032">Parkdrive Apartments</a>, at 25 Sammells Drive, will comprise a mix of one- and two-bedroom residences positioned within walking distance of Westfield Chermside, The Prince Charles Hospital, and Bradbury Park.

Established in 1989, Ausdev has a long-standing presence across both development and construction, with Parkdrive Apartments representing its latest residential project in Brisbane's northern suburbs.

[smartcode_project:default project_id=152125 project_image_fid=363778]

The development has been designed around open-plan living and natural light, with residences featuring stone benchtops, timber cabinetry, BOSCH appliances, and private balconies that extend the living areas outdoors.

Kitchens are positioned as the centrepiece of the homes, incorporating natural material palettes and integrated appliances, while bathrooms have been designed with a focus on functionality and understated finishes.

Residents will have access to a communal barbecue and entertaining area on Level 3, providing shared outdoor space within the development. Secure parking and lift access are also incorporated into the building.

The project will deliver a limited collection of 33 apartments, with one-bedroom residences priced from $749,000.

[smartcode_project:default project_id=152125 project_image_fid=363782]

Beyond the building itself, the location places residents within easy reach of several of Chermside's key amenities. Bradbury Park is around 350 metres away, while Westfield Chermside is approximately 1.3 kilometres from the site. The Prince Charles Hospital is located within 750 metres, and the Chermside Bus Interchange is around 1.5 kilometres away, providing connections across Brisbane.

Parkdrive Apartments adds to the growing residential pipeline in Chermside, a suburb that continues to evolve as a major retail, healthcare, and transport hub for Brisbane's north.

[smartcode_project_cta:default project_id=152125]

Ausdev introduces boutique Parkdrive Apartments to Chermside's growing centre

<a href="https://www.apartments.com.au/developers/skymark-group">Skymark</a>'s boutique Cronulla development Solis has secured a 10-year Latent Defects Insurance policy through Resilience Insurance, providing buyers of the 16-residence building on Ewos Parade with structural and waterproofing protection that extends a decade beyond the building's completion.

Currently under construction and due for completion in late 2027, <a href="https://www.apartments.com.au/new-apartments/solis-cronulla-8-ewos-parade-cronulla-nsw-2230">Solis</a> is one of a small number of new developments in the Sutherland Shire to carry Resilience LDI coverage, a distinction that carries increasing weight as buyer confidence in the off-the-plan sector continues to be shaped by how developers stand behind their product.

Latent Defects Insurance, which entered the Australian market in 2022 when Resilience Insurance was approved to offer the cover, protects buyers against major structural or waterproofing defects for ten years post-completion. Unlike traditional statutory warranties, it operates as a first-resort policy, if a covered defect arises, the insurer responds directly, without the buyer needing to pursue the builder or developer through a lengthy claims process.

Resilience Insurance CEO Corey Nugent has noted that the product addresses something fundamental to the new apartment market.

"The overarching feedback from prospective buyers in the new development space is that they want more confidence and assurances around the quality of the build," Nugent says.

"Resilience Insurance Latent Defects Insurance not only gives them complete peace of mind for 10 years, but it shows the developer they are buying from is standing by their product."

[smartcode_project:default project_id=150499 project_image_fid=370898]

For Solis, the Resilience LDI policy adds a meaningful layer of accountability to an already considered project. The development comprises nine two-bedroom and seven three-bedroom residences, including one dual-level three-bedroom apartment, across a five-storey building on Ewos Parade, positioned between Shelly Beach and South Cronulla.

Garden apartments connect directly to private landscaped courtyards, while upper-level homes capture beach views to the east from level four and above.&nbsp;

All 16 residences include at least one balcony or courtyard, and select apartments on the upper floors feature bar areas and secondary flexible living spaces.

Hiba Sander, Managing Director of Skymark, says Solis offers a rare balance, nestled between the quiet beauty of secluded beaches and the lively charm of South Cronulla's esplanade.

"It's a place to choose your pace and live gracefully, seaside'," Sander says.

[smartcode_project:default project_id=150499 project_image_fid=370900]

The architecture, designed by <a href="https://www.apartments.com.au/architects/ida-design-group">IDA Design Group</a>'s Michael Trinh, draws from the natural erosion patterns of <a href="https://www.apartments.com.au/developments/cronulla-nsw-2230">Cronulla</a>'s sandstone headlands, translating the organic forms of the coastline into soft curves, pavilion-style massing, and a material palette chosen for longevity in a salt-tinged environment.&nbsp;

Textured natural stone, soft renders, and timber-look battens reference the tones of the surrounding cliffs, while the building has been oriented to maximise natural light and passive ventilation, with primary living spaces facing north and east to capture morning sun and sea breezes.

"At Solis, our aim was to create architecture that feels quietly confident, grounded in natural materials like stone and timber, and elevated by light and landscape," Trinh says.&nbsp;

"The buildings are designed to sit gently within their coastal surrounds, with expansive glazing and abundant greenery creating a seamless dialogue between inside and out."

[smartcode_project:default project_id=150499 project_image_fid=370897]

Interiors by <a href="https://www.apartments.com.au/architects/hot-black">Hot Black</a> carry the same material language through to every room. Kitchens feature integrated Gaggenau appliances, sculpted stone benchtops, and Lo &amp; Co joinery, while bathrooms feature natural stone, timber, and brushed metal finishes.&nbsp;

Hot Black Founder and Design Director Sophie Safrin describes the intent as one of considered restraint: "At Solis, every detail has been thoughtfully considered to create a timeless coastal retreat, calm, refined, and effortlessly liveable. From natural finishes to seamless indoor-outdoor flow, Solis offers a quiet elegance that's deeply connected to its surroundings.

The landscape, designed by Julian Brady of <a href="https://www.apartments.com.au/landscape-architect/sitedesignstudios">Site Design Studios</a>, treats green space as an integral part of the resident experience rather than an afterthought.&nbsp;

"Gentle curves and layered native plantings mirror the ebb and flow of the ocean," Julian Brady says, "creating a serene connection between architecture and place."&nbsp;

Coco Republic has provided bespoke furniture packages tailored to the project's coastal palette.

[smartcode_project:default project_id=150499 project_image_fid=370899]

Skymark has an established track record in the Sutherland Shire, with a portfolio spanning Cronulla, Woolooware and Burraneer that includes Isla, Sylva, Bask, Shells, Sula and Mist. Securing LDI on Solis reflects a broader shift in how the developer is positioning its buildings to buyers, at a time when Resilience Insurance expects the policy to become mandatory in New South Wales by 2028.

Sales at Solis are launching soon through Ray White Projects, with an official event scheduled for 11 June. Enquire for more information.

[smartcode_project_cta:default project_id=150499]

Skymark takes out 10-year Resilience Insurance LDI at Solis Cronulla

Property Forecast

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EXPERT OBSERVATION
Within a country of the size and breadth of Australia, where hundreds of marketplaces function independently and simultaneously, it’s no surprise that real estate is a dynamic industry.
The past 12 months have been no exception: Sydney and Melbourne, the largest metropolitan markets, have softened after prolonged growth; activity in regional markets has grown as buyers seek affordability; investor activity has slowed; the banks tightened lending criteria in the wake of the Hayne Royal Commission; and state legislators moved to give tenants more rights in their rental properties.
So, what’s around the corner in 2019?
1) Polling points to a change in government in 2019.
As constituents did in the Wentworth by-election, analysts believe the public will again queue up at polling booths to punish the Coalition for an unstable year of leadership. But, focusing on property, Labor is taking to the election the same negative gearing and capital gains tax policies it proposed at the 2016 election.
Labor wants to restrict negative gearing to new builds and halve the current capital gains tax discount on investment properties.
Over the last three years, opponents to the policy have said it will turn investors away from property, jeopardising the availability of rental stock and making tenants compete for remaining rentals.
Research undertaken by LJ Hooker has shown negative gearing is an important part of the public’s investment strategy with a poll of 1,700 landlords indicating 31% would sell some or part of their property portfolio if negative gearing was abolished or restricted.
Labor’s policy originated in 2015 at the height of property growth in Sydney and Melbourne, where property values grew around 15% and 10% respectively, over a 12-month period.
But over the past year, both cities have seen prices decline by -8% in Sydney and -5% in Melbourne.
Additionally, removing negative gearing creates less demand for real estate-based employment.
The real estate industry would require fewer strata and property managers and rental properties require regular maintenance to be compliant and a fall in demand would impact trades people, handymen and other service providers.
Interfering with how people choose to invest while the market is self-correcting will could pose a major challenge for the wider market in 2019.
2) FHBs march continues
After several frustrating years on the sidelines, First Home Buyers (FHBs) have been a good news story of 2018.
Data from the Australian Bureau of Statistics (ABS) show FHB activity rose 14.9% in the year to October.
Indeed, not since 2009 have more FHBs been involved in the marketplace.
FHBs came to the fore as tighter lending restrictions – a product of the Royal Commission into Banking, Superannuation and Financial Services Industries - made it difficult for investors to compete for the same sort of entry level stock.
Softening house prices in the major metropolitan markets provided the best levels of affordability for FHBs for several years.
The final Hayne Commission report will be handed down in February, with a Federal budget and election following soon after.
Lenders will no doubt be chastised in the final Report, as they were in the Interim volume.
We expect investors will continue to feel the immediate fall-out from the Report which - along with tightened residential yields – will make it harder for them to maintain real estate within their wealth strategy.
Consequently, FHBs will have less competition at auctions around the country enabling more to make the leap from renting to owning.
FHBs are an important part of the real estate ‘food chain’. When FHBs are active, they enable second, third and fourth home buyers to sell their homes and upgrade. Expect to see FHBs out in force again in 2019.
3) Global forces and regulators
Buyers and investors have become accustomed to the monthly Reserve Board of Australia (RBA) meeting passing with no fanfare; it’s been 28 months (August 2016) since the Board changed the official cash rate.
However, the Central Bank’s influence goes only so far with several of the Big Four lifting their variable rates independent of the RBA’s decision making since then.
Global forces – Brexit, the controversial Trump presidency and the ambitions of China – will cause economic reverberations around the world at the same time that Central Banks are increasing cash rates. These two things will combine to push up the costs of financing for banks which will, in turn, increase mortgage expenses.
The Hayne Royal Commission will also conclude and release recommendations which may also see lending criteria tighten and borrowers jump through more hoops to get a mortgage.
4) Users tap the digital marketplace
Technology plays a greater role in our lives every year. 
In 2019, LJ Hooker will overturn the communication channels between the industry and customers. LJ Hooker has released the LJ Hooker Vendor App.
The app is an industry-first product, allowing sellers a birds-eye perspective of the selling process in real time.
The LJ Hooker Vendor App provides sellers with immediate information on how many people attended their open home; the number of impressions their property received online; and even tips on how to best present their property for buyers.
2019 will be the year in which real estate sets a new benchmark in this space.
5) Regional radar
Despite a correction in prices, buyers will continue to look outside the capital cities for better value.
Proximity to Melbourne’s corporate hub, mixed with the coastal lifestyle and its own transition from a blue collar to white collar economy has underpinned Geelong’s fortunes, with the median house price increasing 16.6% to $579,000 over the past 12 months.
The introduction of new infrastructure to support the Commonwealth Games on the Gold Coast this year saw the median house price rise to $655,000 in November, up from $627,000 at the same time last year, according to CoreLogic (a 4% increase), while the Sunshine Coast median increased 7.7%.
Also, government polices encouraging people to relocate to regional centres will increase demand in these areas.
For instance, the Andrews Government’s first home buyer grants encourages renters to make the transition to ownership by building in a regional area with a $20,000 incentive.
In NSW, Premier Gladys Berejiklian has flagged incentivising students which are a part of the state’s $11 billion international education sector to head to universities outside Sydney.
Markets to watch in 2019 will also include the resources regions. In 2018, the mining state of WA posted its first net population growth figures for several years. It had an immediate impact on the rental market in Perth with the Real Estate Institute of Western (REIWA) reporting a 3.4% vacancy rate in the September quarter - the best performance for the state’s investors since March 2014.
Perth is a launchpad for Fly-In, Fly-Out workers in the iron ore hub of the Pilbara. The Pilbara’s median house price has increased 4.3% to October ($240,000). Whilst it has struggled since the mining boom (the median house price has dropped 69.2% over the last five years) the local employment opportunities bode well for a continued property recovery in 2019.
Central Queensland was likewise a former darling for property investors with areas like Moranbah and Dysart returning massive rental returns as mining propelled the Queensland economy. Production is starting up again and the wider Mackay market posted a 12.6% increase in its median house price to $310,000 this year.
Consequently, many regional markets will outperform their capital city counterparts over 2019.
Mathew Tiller is the head of research at LJ Hooker.
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j.ballantyne1990-6AQqhLzZaK

Five 2019 property predictions from LJ Hooker's head of research Mathew Tiller

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There are three leading economists who think that the Reserve Bank will be cutting interest rates this year; AMP Capital's Shane Oliver, Industry Super's Stephen Anthony, and Market Economics' Stephen Koukoulas.
"The Reserve Bank is conflicted. It knows the economy is slowing and that risks are building in asset markets, especially east coast property," Mr Anthony told Nine Entertainment.
"But should that be the official forecast? It also knows that if it can 'manage' sentiment it may also contribute to a softening of activity rather than a bust, especially via property prices and dwelling investment."
It was more likely we had entered "a secular bear market phase" with respect to asset prices, Mr Anthony suggested.
"With the background being declining residential house prices, especially in Sydney and Melbourne, the wealth effects will be significant, likely reducing household consumption growth to at or below 2 per cent in 2019."
<a href="https://www.propertyobserver.com.au/subscribe" target="_blank"><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/2019/1/1/Strip%20ad%20keep%20up%20in%202019.jpg" alt=""></a>
Dr Oliver believes the Reserve Bank's bias is "still slightly hawkish" in that "it has not turned dovish yet but it is getting less hawkish and bit more open to the view that the next move in rates may not be up".
Nine Entertainment did a poll of 38 economists on the direction of the next interest rate move and 35 advised the Reserve Bank will likely put them up in 2020.
The consensus was that the RBA would raise the official cash rate to 1.75 percent by June 2020.
Eighteen months ago most of them were forecasting a rate rise in 2018. Six months later, predictions moved to 2019. Now the general consensus is rates won't go up until 2020 - with some even calling out to 2021.
AMP chief economist Shane Oliver arrived at his view <a href="/expert-insights/finance/rba-to-cut-rates-second-half-of-next-year-shane-oliver">a few weeks back</a> after the September quarter Australian GDP figures (which came in December) showed the rate of growth had slowed to an annualised 2.8 per cent.
Oliver reasons that the RBA won't move to lower the rate in any attempt to head off further falls in the property market but to help households that carry a mortgage.
But the reversal in house values over the past year has promoted a negative wealth effect which is more likely to result in consumers spending less.
To have much impact the RBA would need to cut twice so Oliver said the official cash rate might go down to 1 percent given the slump in the major housing markets of Sydney and Melbourne. 
The Reserve Bank made a policy error in pursuing stability in interest rates in the belief this would encourage confidence, Mr Koukoulas argued.
"The very slight change in tone in recent times is a belated realisation of this error and if, as seems likely, inflation remains outside its target range and its rosy forecasts for growth and unemployment fall flat, it will, pragmatically, change tack."
The wealth effect and its relationship with consumption growth also had been played down, he said, "at its peril".
The RBA will announce its initial 2019 monetary policy decision when the board convenes next month.
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Why the RBA will cut interest rates in 2019

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Short term weakness in 2019 house prices seems assured as the tight credit conditions and restrictive monetary policy settings constrain demand, according to economist Stephen Koukoulas.
"Nationwide prices may drop 5 per cent by the September quarter, with sharper falls likely in Sydney and Melbourne," he forecasts.
"Late 2019 will be the likely trough in house prices as easier monetary policy unfolds, there is a step up from previously frozen out first home buyers and the strength in demographic demand as fresh supply falters in line with the slippage in building approvals are all likely to put a floor under prices.
His call envisages a 5 per cent drop over first half of 2019 and then a 2 per cent rise in the second half.
"2020 might see a 3 per cent house price lift," he speculates.
<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/2019/1/1/Strip%20ad%20keep%20up%20in%202019.jpg" alt="">
He recently wrote on <a href="https://au.finance.yahoo.com/news/dont-look-now-almost-certainly-poorer-year-ago-211934583" target="_blank">Yahoo Finance</a> that if you are a home owner in Sydney, Melbourne, Perth or Darwin and if you have a superannuation nest egg, the odds are you are less wealthy today than you were a year or two ago.
He noted the Australian stock market, where the bulk of superannuation assets are likely to be invested, had slumped 11 per cent since August, reducing the value of stocks by around $200 billion. 
"At the same time, home owners in Sydney, Melbourne, Perth and Darwin are seeing the value of their homes getting crunched.
"Here are some examples. 
"A house in Sydney that was $1 million in July 2017 is now worth around $890,000, a loss of $110,000 in 18 months.
"In Melbourne, a house that was $800,000 in early 2018 has lost around $50,000 in value, to now be worth around $750,000.
"In Perth, the situation is more parlous. Prices have dropped 15 per cent since late 2014, meaning that a property that was $600,000 in 2014-15 has lost close to $100,000 in value to be worth just over $500,000.
"Ouch!"
He suggests as the loss of wealth filters through to more and more householders, or perhaps when they see the house around the corner not sell for months and when if finally does, the price is a shock, consumers will likely scale back their spending, rebuild savings and be generally cautious in their approach to spending in 2019.
"This will undermine growth in the economy."
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Stephen Koukoulas forecasts national house prices to begin small rise in late 2019

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Australia's financial and banking regulators should be prepared for a hard landing in the housing market, according to the Organisation for Economic Co-operation and Development.
It says the housing market poses a risk to the nation's economic growth going forward.
But the Paris-based group said in a report released on Monday that the market is on track for a soft landing.
"Financial supervisors and bank regulators should be prepared in the event of a hard landing in the housing market," the report states.
The agency suggests Australia's long span of economic growth - 27 consecutive years - was likely to continue.
"Life is good, with high levels of well being, including health, and education," the group said in its latest Australian economic survey.
"Robust economic growth is set to continue," it said.
"High indebtedness of households remains a risk.
"Unexpectedly large corrections in house prices could reduce household wealth and consumption, and impact the construction sector.
"New capacity coming on stream in the resource sector will support exports and business investment will pick up.
"Growth of wages and prices will rise gradually, while the unemployment rate will edge lower.
"Output growth will moderate slightly in 2020 as capacity constraints tighten, export-market growth slows and households become less willing to draw down savings to fuel consumption.
<div class="page" title="Page 1">
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<div class="column">
"Monetary policy tightening will be required as the pick-up in wages and prices gathers pace. 
"Risks from the housing market and high household indebtedness warrant continued vigilance. 
"The government is projected to reach a budget surplus in 2019, giving sufficient room to support activity and protect the incomes of vulnerable groups in the event of an unexpected downturn."
</div>
</div>
</div>
Regulators should also turn their attention to ensuring accountability, transparency and competition among financial institutions after the banking royal commission, the OECD has recommended.
Aside from the housing market, the agency said risks to the growth outlook include uncertainty around export demand - due to rebalancing in China - and the potential escalation of global trade tensions.
Challenges in boosting productivity - which involves increasing the value derived from the work and resources put into the economy - are also a risk.
The OECD, which has 36 member nations, has called for interest rates to be gradually lifted as growth continues and inflation slowly rises.
The Reserve Bank of Australia has kept the official cash rate at its record low of 1.5 per cent since August 2016.
The OECD said if the economy stays robust and avoided a downturn, the RBA should raise the overnight cash rate.
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Property market on track for soft landing in 2019, but regulators should be prepared incase of hard landing: OECD

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<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/2018/11/21/700x425%20price%20falls%20or%20crush.jpg" alt="">
2018 has been a difficult year in some of Australia's major property markets, however it has allowed other areas to thrive.
The outlook for Sydney and Melbourne heading into 2019 isn't that optimist from a vendors' perspective, but buyers might be happier if they secure finance, according to a number of economists.
First home buyers are back in the driving seat in certain areas across the county as prices continue to decline.
Enjoy our free e-book on how the property market has faired in 2018 and what the forecasts are for 2019.
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po-LsXgBTHBmX

Free eBook: Orderly price falls or Australian housing market crash? The 2019 forecasts from the experts

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One of the world's largest fund management groups has disputed suggestions about a collapse of the Australian residential property market.
Vanguard, which has $7 trillion under management globally, claims slowing residential property market is unlikely to turn into a sharp downturn that could derail economic growth. 
Vanguard says there is only a low risk of a sharp correction.
The US funds house conducted an in-depth analysis of four of the world’s largest and most developed housing markets.
It found that Australia and Canada stood out because of their high cost of housing and high levels of household debt, even compared to the US and Britain.
The house price to income ratio in Australia for the quartile is the highest ever, while household debt to GDP is ­approaching an all-time high of 122%.
Vanguard determined that Australia’s housing market rally had “exceeded expectations” ­beyond traditional measures of housing demand versus supply, interest rates and foreign investment.
However, the fund manager’s economists considered there was a low risk of falls causing a ­recession in all markets studied, including Australia.
“A big unknown is how households deal with their high debt given the slow income growth in Australia, however, and this will be a large factor in what transpires in Australia’s housing market,” Vanguard economist Matthew Tufano said.
“However, the large pipeline of housing — mostly apartments — coming into the market in Australia could effect a more gradual moderation in house prices, rather than a sharp ­correction.”
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Property slowdown to be short and shallow, not sharp: Vangaurd

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Macquarie Group now forecasts the current downturn in Sydney's housing market will be larger than it first anticipated, with price declines of between 15 per cent to 20 per cent likely.
The decline will wipe out price gains secured since 2015, putting buyers over the last three years into negative equity.
The report suggests the falls to date have so far "been orderly with little evidence of distressed selling." But it suggests the fear of buying too early by buyers waiting in the wings will send the market into deeper decline.
The report, headed Healthy Correction or Bruising Bust? says without any significant economic downturn the medium term, most likely scenario was several years of flat prices after the fall.
<div class="_1665V undefined">“In June, we revised our expectations to be for a 4 to 6 per cent peak-to-trough fall in national housing prices and for a decline of around 10 per cent in Sydney,” wrote Justin Fabo and Ric Deverell, members of Macquarie Research’s economics team.</div>
<div class="_1665V undefined"> </div>
<div class="_1665V undefined">“Fast forward to now and it’s becoming clear that the extent of price declines is likely to be even larger."</div>
<div class="_1665V undefined"> </div>
<div class="_1lC_G"><img src="https://www.urban.com.au/images/2018/11/8/Graph%202.JPG" alt=""></div>
<div class="_1lC_G"> </div>
<div class="_1lC_G">“The overall decline is now likely to approach 10 per cent… the largest peak-to-trough decline in nominal housing prices in almost 40 years.”</div>
<div class="_1lC_G"> </div>
<div class="_1665V undefined">
<div class="_1lwW_"><source media="(min-width: 1024px)" srcset="https://static.ffx.io/images/$zoom_0.43%2C$multiply_1%2C$ratio_1.776846%2C$width_1059%2C$x_0%2C$y_0/t_crop_custom/w_780/t_sharpen%2Cq_auto%2Cf_auto/663c0ff658bef82614c27caf69134bce6106e9e9"></source></div>
The report noted Sydney average dwelling prices had fallen 9 per cent already and were "currently falling at annualised monthly rates of roughly 10 per cent."</div>
<div class="_1665V undefined"> </div>
<div class="_1ysFk">
<div class="_1665V undefined">“This suggests that Sydney and Melbourne housing prices are now more likely to fall by 15 to 20 per cent from the peak."It acknowledged the fall in Sydney prices "is already one of the largest on record.”</div>
<div class="_1665V undefined"> </div>
<div class="_1lC_G">“Because of the extent of the rise in Sydney and Melbourne housing prices in recent years, even a 20 per cent peak-to-trough decline would merely take prices back to April/May 2015 levels,” they say.</div>
<div class="_1lC_G"> </div>
<div class="_1lC_G"><img src="https://www.urban.com.au/images/2018/11/8/Graph%203.JPG" alt=""></div>
</div>
<div class="_1lC_G"> </div>
<div class="_1lC_G">"With the benefit of hindsight it is now clear that the housing price correction will be deeper. </div>
<div class="_1lC_G"> </div>
<div class="_1lC_G">"Investor demand has moderated significantly amid price falls, and negative sentiment is weighing on both owner-occupier demand for housing (fear of buying too early) and the availability of credit as banks more rigorously apply lending criteria in the face of the risks associated with the Royal Commission (fear of being accused of irresponsible lending)," Fabo and Deverell noted.</div>
They argued recent concerns over a potential credit crunch and Labor's negative gearing potential impact are overblown.
"A significant curtailment of the availability of credit should see declining average loan sizes in addition to weak aggregate lending. We are seeing neither of those." they say.
It also suggest the risk posed by the proposed changes to negative gearing and capital gains tax from any Labor Government "will likely be small"
This article was first published in the Daily Telegraph.
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jchancellor-FAypfDUnLy

Fear of buying too early will send property downturn deeper: Macquarie

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EXPERT OBSERVER
Here’s the hardest thing for real estate consumers doing research: who do you believe?
It’s hard to know who’s worth listening to and who is not. There are so many people pumping out press releases, writing commentary pieces and pontificating on television about our housing markets – and only a small fraction of this mass of white noise is worthy of your attention.
But there are markers which expose the pretenders – clues which allows you to separate the genuine experts.
Here’s how to identify the pontificators you should ignore:-
1. They discuss Australian real estate as a single market
The Federal Treasurer Josh Frydenburg exposed himself as a pretender in a recent column published in The Australian. His opening paragraph stated, as a fact: “Prices in our major capital cities have fallen for 12 consecutive months …” 
In doing so, one of our most senior federal politicians perpetuated one of the worst pieces of misinformation currently out there.
Frydenburg’s statement is outrageous misinformation. One source that is often quoted, CoreLogic, has the average result for the eight capital cities as a negative figure, but at the same time records that nine of the 14 major market jurisdictions (eight capital cities and six regional areas) have prices higher than a year ago.
Other research sources have different figures. SQM Research, for example, records the national average results as a 1.7 percent rise in annual terms, while the latest ABS figures record quarterly price rises in five of the eight capital cities.
So the claim that prices have been falling everywhere for 12 months is unsupported by any of the research evidence. The Federal Treasurer is simply parroting misleading media headlines.
But Frydenberg is not alone in his ignorance. Indeed, he has lots of company, when it comes to extrapolating the Sydney/Melbourne situation into a national downturn. Economists, in particular, are prone to misinforming Australians by discussing the nation as a single market and often getting their analysis wrong by generalising about prices.
We’d all be better off if they simply shut up.
Contrast that with these recent comments from someone with real credentials, veteran adviser and commentator Noel Whittaker:
“The problem is that most media commentary focuses on that elusive animal they call the ‘property market’. We might be told that Australian property is overheated, or that the property market has fallen by 5.6 per cent in the last year (in Sydney), or that Perth values have fallen by 12.6 per cent after peaking in 2014.
“But the fact is there is no such a thing as a single property market – not for Australia, not even for a single capital city – there are myriad property markets all doing their own thing. How can you compare a townhouse in Cairns with a mansion in Point Piper? All over Australia some markets may be rising, other markets may be falling, and some may be flat.”
Whittaker has encapsulated exactly how I see it.
Next time you hear/read a commentator discussing “the Australian property market” or claiming that “Australian house prices have fallen 5 percent”, turn the page or change channels because the talking head/writer is a charlatan pretending to be an expert.
2. They’re not real estate specialists
The problem with Josh Frydenberg is that, while he may prove to be a capable Treasurer, he’s not a real estate expert. Residential property is not his specialty.
This is the core problem with many of the prolific pontificators. Economists frequently make the mistake of thinking they can extrapolate their financial knowledge and economic theories to the real estate market. After 35 years as a real estate specialist, I’m still waiting to encounter an economist who understands the peculiar dynamics of real estate markets.
Last week I wrote about my Top 20 Worst Predictions About Australian Real Estate. Most of the people who made that list by getting their predictions horribly wrong were economists who strayed outside their area of speciality.
True real estate experts who are worthy of your attention are those who are genuine specialists for whom researching markets is a daily routine. They’re also people who don’t treat real estate data as a vehicle for free publicity, but as a means to inform the public by presenting well-considered and balanced analysis.
They include people like Louis Christopher of SQM Research and Simon Pressley of Propertyology. These are genuine experts who specialise in residential property. I don’t suggest they’re right about everything but they have earned the right to be heard by being real, independent, devoted experts.
3. They believe it’s all about interest rates
Most of the pretenders talk about the level of interest rates as the prime determinant of real estate markets and their cycles.
Ask your average economist why Sydney boomed and they’ll tell you it was “record low interest rates”.
This is a ridiculous for several reasons. If the level of interest rates was the catalyst, why no boom in Brisbane? Or Adelaide, Canberra and most of regional Australia. Why have prices fallen in Perth and Darwin during this period of record low rates?
It’s false logic to assume, as many economists do, that low rates = boom and rising rates = downturn. The two big nationwide property booms of the past 30 years (late Eighties and early Noughties) both occurred during periods of high and rising interest rates.
The end of the Sydney/Melbourne booms occurred with interest rates still at these very low levels.
The profile of the person you should ignore is an economist who rants about “the Australian property market” in the context of national factors like interest rates and APRA decisions – and generally tends to feel that everything that happens in real estate markets is an outrage because it doesn’t fit with their economic models of what prices should do and where values should be.
The genuine expert will discuss individual markets, include different sub-markets within each of our major cities, and will understand the fundamental importance of the underlying local economies, influenced by population trends, infrastructure spending, jobs creation and supply-demand factors.
Terry Ryder is the founder of hotspotting.com.au
<a href="https://mailto:ryder@hotspotting.com.au">ryder@hotspotting.com.au</a>
twitter.com/hotspotting
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terryryder-YECXbqmri2

How to identify a misinformed property forecaster: Hotspotting's Terry Ryder

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EXPERT OBSERVER
Two years ago I researched media predictions about residential property and compared the forecasts with subsequent outcomes.
It showed the remarkably bad track record of spruikers, economists and attention-seekers in forecasting what will occur in our markets nationwide. 
Over the past 15 years or so, it’s become trendy to make doomsday forecasts about real estate. A popular number is 40 percent - i.e. the standard scary prediction is a 40 percent drop in our property values, usually tipped to take place in the next 12 months.
Every single one of these forecasts has been proven spectacularly wrong – not surprisingly, because most of them have been fanciful in the extreme and I’m quite certain that the forecasters themselves did not believe what they were saying. The goal has been to achieve some quick and easy publicity. 
Out of this research exercise I compiled a list entitled “Top 20 worst predictions about Australian property markets”.
No.1 on this list was a US spruiker called Jordan Wirsz (don’t feel bad if you’ve never heard of him) who visited Australia in 2012 and forecast a 60 percent fall in home values in a “bloodbath” to take place in the next year. He also tipped that land values would decline 90 percent.
Can you imagine that? He was claiming that our residential land would be virtually worthless. 
Nothing remotely like that has ever occurred in the history of planet Earth and it’s difficult to comprehend why anyone would think it could happen in Australia.
The most amazing thing was that Australian media gave these predictions credibility and gave the touring spruiker exactly what he wanted – lots of free publicity.
What followed this prediction was five years of major price increases in our two biggest cities and mostly steady markets in the rest of Australia.
Another US pontificator, Harry S Dent, has visited Australia several times in the past seven years and each time – including in 2011 and 2014 – has warned that our property prices would crash in the next 12 months.
Each time Australian media has treated him as a credible commentator, with oodles of free profile, notwithstanding his growing track record of getting his forecasts about our real estate markets utterly wrong. I’m sure that next time he visits the same will happen again.
My Top 20 list also includes local economists who have made similar predictions within specific time frames, with the same success rate.
Some have claimed that our homes are over-valued according to their favoured economic model and therefore prices must fall. Others have stated that, back in the days of rising interest rates, that the higher cost of money would cause a collapse of property values.
The head of one of our major banks said in 2011 that the sovereign debt crisis in Europe would force down our property values, only to be followed by several years of strong price rises.
One high-profile and much-quoted Australian economist declared in 2005 that there would be no growth in our home values for the next 10 years. Ouch.
Also on the Top 20 list are commentators who rushed – in 2013 and 2014 - to be the first to declare the end of the price boom in Sydney and Melbourne. 
One of them was a senior official at the Reserve Bank, while another was a Morgan Stanley analyst who famously said, about three years too early: “If you’re an investor, you’ve missed the boat.”
So now we have the notorious 60 Minutes debacle, with yet another forecast of property values falling 40 percent, based on nothing but a pre-conceived notion to boost ratings.
I note that virtually every independent commentator who has reacted on the 60 Minutes program has said that the forecast scenario was highly unlikely or plain silly. Even the key analysts featured on the Channel 9 program have claimed that their views were misrepresented through selective editing. I spoke to one of those who was featured on the program and he was horrified at the outcome.
I was approached by 60 Minutes in mid-August to take part in the program. But they dropped the planned interview when I told them I disagreed with their basic premise of collapsing property markets.
This is not how journalism is meant to work. In true journalism, you do your research and conduct your interviews - and then you come to some conclusions and decide your headline. 60 Minutes did it backwards by deciding the headline and then seeking comment that supported it.
I complained to the ABC television program Media Watch and last week they did a segment pointing out the many flaws in the 60 Minutes segment.
I’m sure the 60 Minutes program will feature prominently next time I update my Top 20 Worst Predictions list, with the same level of success as the many doomsday forecasters who have preceded them.
Terry Ryder is the founder of hotspotting.com.au
<a href="https://mailto:ryder@hotspotting.com.au">ryder@hotspotting.com.au</a>
twitter.com/hotspotting
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The 20 worst crash predictions about the Australian property market: Hotspotting's Terry Ryder

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The NSW Government’s unveiling of its 20-year vision for a thriving regional NSW spells good news for the property market, RiskWise Property Research CEO Doron Peleg said.
Peleg says anyone seeking long-term capital growth would be wise to investigate buying property in the region especially given an extra 185,000 new residents were expected, on top of the population growth already predicted, by 2038. 
The Government’s 20-year vision focuses on connectivity and water security to industry and community leaders in Bathurst in the State’s Central West and sets out a framework for investment that will guide the allocation of resources from the new $4.2 billion Snowy Hydro Legacy Fund.
The goal is to promote regional development and job creation, unlocking the potential in the region by providing the infrastructure, the services and the support it needs to thrive. 
According to Premier Gladys Berejiklian, at the centre will be “a new generation of nation-building projects enabled by the $4.2 billion Snowy Hydro Legacy Fund” creating an additional 260,000 new jobs between now and 2038.
The vision also brings together the NSW Government’s long-term planning strategies including the Future Transport Strategy 2056 and the NSW State Infrastructure Strategy, with plans to attract an extra 185,000 new residents. 
Studies and planning works will also be undertaken for an inland port and investment precinct in Parkes, known as The Parkes National Logistics Hub, which is expected to attract major employers, drive local economies and create jobs across the Central West.
Peleg said population growth, job creation, an improved economy and good infrastructure would draw more people to the area and therefore increase demand for property.
"Also regional NSW has become a more attractive property destination," he said.
"While the Sydney market has cooled - and in some areas prices have actually dropped - the city is still ranked 9th in the world when it comes to poor housing affordability of family suitable units.
"The gap between the household income people need to buy a Sydney inner-city unit of just 105sqm, suitable for families, to the income they really have is so huge a household with the median income would really struggle to afford one.
"It comes down to undersupply of suitable dwellings that force the price up and make them completely unaffordable. But that is not the case in regional NSW where house sizes and blocks are more than adequate for a growing family."
For example, in Bathurst the median house price is $422,949 and for a unit $301,644 compared to Greater Sydney which has a median house price of $1,100,355 and a median unit price of $768,142.
Bathurst also enjoys a house price-to-income ratio of 6.2 which is well below that of Greater Sydney (at 12.1) and the rest of Australia (8.4).
In Parkes, the median house price is $251,353 and the unit price $227,832, with a house price-to-income ratio of 4.4.
Peleg said there was also an increasing trend of ‘mobile professionals’ who were prepared to work from home to maximise lifestyle and avoid the daily city commute.
"The bottomline is regional NSW is a great alternative location to Sydney for those looking for affordable housing with the long-term goal of solid capital growth," he concluded.
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