Prolific Gold Coast developer <a href="https://www.apartments.com.au/developers/sherpa-property-group">Sherpa Property Group</a> is expanding its development footprint into Brisbane with a new, affordability-focused collection of apartments.

The developer, well known for its projects in the Gold Coast’s premium beachside suburbs, last year announced its new Flourish brand. The aim is to provide a wide range of apartments at more affordable price points compared to what was otherwise available in the local market.

Now they’re taking that blueprint to Brisbane. Their debut development, <a href="https://www.apartments.com.au/new-apartments/symphony-south-brisbane-21-23-cordelia-street-south-brisbane-qld-4101">Symphony</a>, is located in the heart of South Brisbane on Cordelia Street, just around the corner from the Fish Lane precinct, the suburb’s main hospitality hub.

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There will be 138 one-, two-, and three-bedroom apartments, starting from $655,000. First home buyers will pay no stamp duty on a new home under the <a href="https://www.apartments.com.au/news/qld/first-home-buyers-to-pay-no-stamp-duty-on-new-property-in-qld-gov-shakeup">QLD Government's new stamp duty concessions</a>, which began in May.

Founder Christie Leet said the move into Brisbane represents “an incredibly exciting step” for the group, with the South Brisbane market offering “huge potential to deliver something different in a market that really needs it.”

He said the project is about “helping more people live where they want to be, without compromise,” adding that Flourish homes are designed to balance quality, functionality, and price accessibility.

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Designed by <a href="https://www.apartments.com.au/architects/hal-architects">HAL Architects</a> and to be built by <a href="https://www.apartments.com.au/builders/lps-group">LPS Group</a>, Symphony will feature more than 1,400 sqm of communal spaces spread across three levels, aimed at fostering community and wellbeing.

A ground floor café or retail space will activate the streetscape, while the lower rooftop will house workspaces, a gym, and private dining areas. The upper rooftop will deliver resort-style amenities, including a heated pool, cabanas, and a dedicated wellness centre.

Situated at the meeting point of South Bank, West End, and Fish Lane, Symphony places residents in one of Brisbane’s most connected and culturally vibrant neighbourhoods. The site is within walking distance of South Bank’s galleries, theatres, and riverside parklands, as well as Brisbane’s CBD.

Brisbane’s ongoing infrastructure pipeline, including Cross River Rail, Queen’s Wharf, and the Brisbane Metro, is set to further enhance the area’s connectivity ahead of the 2032 Olympic Games, strengthening South Brisbane’s appeal to both owner-occupiers and investors.

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Sherpa plans to officially launch Symphony to market in October 2025, with construction due to commence in December 2025 and completion anticipated in Q3 2028.

The launch follows the strong performance of Sherpa’s first Flourish development, Amargo, in Palm Beach, which is 80 per cent sold.

[smartcode_project_cta:default project_id=7574]

Joel Robinson

Sherpa opens pre-release for debut Brisbane apartment development, Symphony

The small southern Gold Coast suburb of Bilinga rarely sees new apartment developments.

The last launch was Pipis in late 2023 — a boutique project of just 19 half- and full-floor beachfront apartments. Opportunities to buy into a development with more affordable configurations are few and far between.

Enter <a href="https://www.apartments.com.au/new-apartments/bilinga-house-107-golden-four-drive-bilinga-qld-4225">Bilinga House</a> — 47 two- and three-bedroom apartments priced from just under $1.2 million.

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Developed by <a href="https://www.apartments.com.au/developers/centa-property-group">Centa Property Group</a>, Bilinga House is located on Golden Four Drive, just 200 metres from Bilinga Beach.

Designed by renowned architecture firm <a href="https://www.apartments.com.au/architects/rothelowman">Rothelowman</a>, the five-storey building embraces a soft, neutral palette to maximise natural light and capture sea breezes. Floorplans feature generous built-in storage, contemporary kitchens, and master suites with ensuites.

Residents will enjoy access to a pool, gym, and sauna, along with professional onsite management. Each apartment includes at least one secure basement car space.

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Location is one of Bilinga House’s biggest drawcards. The fact that it’s not absolute beachfront means pricing is considerably more affordable. Many apartments still offer beach and ocean views, and the sand is just a short 200-metre stroll away.

Another bonus for off the plan buyers is the proposed Stage 4 extension of the Gold Coast Light Rail, which will run along Golden Four Drive to Coolangatta and Kirra — arguably the most transformed pocket of the southern Gold Coast over the past five years. Bilinga House is also just a short walk from the North Kirra Surf Life Saving Club.

The line will also connect to Broadbeach, Surfers Paradise, Main Beach, and as far north as Helensvale, where there’s a train link to Brisbane.

Construction will be undertaken by renowned builder <a href="https://www.apartments.com.au/builders/greyburn">Greyburn</a>, with completion targeted for late 2027.

[smartcode_project_cta:default project_id=150037]

Bilinga House launches in booming southern Gold Coast pocket

Northland Group’s Central Quarter apartment development, located in the heart of Merrylands, ticks every box that buyers consider when purchasing a brand-new apartment.

CQ, currently under construction on Pitt Street, will comprise 194 one-, two-, and three-bedroom apartments in the heart of the growing suburb.

<h2>Guaranteed Delivery</h2>

First and foremost is the guarantee of delivery. <a href="https://www.apartments.com.au/developers/northland">Northland</a> has only just launched the development, despite being close to topping out the main structure. They progressed well into construction before bringing the project to market, giving buyers confidence that the development is genuinely moving ahead.

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<h2>Quality Assurance</h2>

The second — and perhaps most important — consideration for new apartment buyers is not just whether the project will be completed, but whether it will be finished to a high standard. Northland Group is the only developer in Merrylands to take out Resilience Insurance’s Latent Defects Insurance, offering buyers protection from any structural or waterproofing issues for 10 years after completion. Northland also has a vastly experienced construction team, having been building across Sydney for the best part of three decades.&nbsp;

<h2>Prime Location</h2>

The third pillar, which is paramount, is location — and how well the apartment fits into a buyer’s lifestyle. It must be well-connected to both transport and local amenities. <a href="https://www.urban.com.au/new-apartments/central-quarter-merrylands-242-252-pitt-street-merrylands-nsw-2160">Central Quarter</a> occupies a prime site on Pitt Street, right next to the Merrylands Bus Interchange and Merrylands Train Station. This offers direct access to Parramatta, just one stop away, and places the CBD within 35 minutes.

<h2>Amenity-Rich Environment</h2>

While the development is already close to everything Merrylands has to offer, Northland Group is adding further value by delivering 22 new retail tenancies at the base of the building and within the commercial podium. Confirmed tenants include a 24/7 gym operator, a provider for a 111-place childcare centre, and major fast-food retailers.

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Residents will also have private access to a rooftop with several breakout spaces, barbecue areas, and a children's playground.

<h2>Thoughtfully Designed Apartments</h2>

With all the above boxes ticked, attention turns to the apartments themselves. Northland has gone above and beyond, offering large floorplans and premium finishes as standard. Kitchens include stone island benches, integrated Smeg appliances (gas cooktop, oven, rangehood, microwave, and dishwasher), and Villeroy &amp; Boch tapware.

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Even the small details haven’t been overlooked. The integrated VRF air conditioning system allows for zoned temperature control in each room. Furthermore, each Central Quarter balcony will be built with pedestal tiles allowing for seamless indoor/outdoor living.&nbsp;

<h2>A Decade in the Making</h2>

Central Quarter has been over a decade in the making, with Northland Group securing the site back in 2014. Years of careful planning and design have gone into creating a product that truly suits the area.

With completion expected by early to mid-2026 and interest rates forecast to fall further before then, now is arguably the perfect time to secure a new home at this advanced stage of construction.

[smartcode_project_cta:default project_id=5660]

Why Northland Group’s Central Quarter apartment development ticks every box

High-end retailer Cult Design has signed up to take all of the commercial space, and a large section of the retail space, on the street-level of the upcoming new Fitzroy apartment development, Fitzroy Fitzroy.

Cult Design, which offers&nbsp;premium&nbsp;furniture, lighting and objects from iconic international and local brands, will also furnish the communal areas of the project with Cult’s brands, as well as Cultivate — Cult’s in-house sustainability program that provides buyback, refurbishment, and recycling services — a program that aligns with the project’s efforts to restore and preserve the heritage aspects of the building. Current and future residents will also have the option to purchase a turnkey furnished solution curated by Cult.

Cult has taken&nbsp;the entirety of the project's commercial space, and two of the three retail lots, which will form Cult's new HQ and flagship showroom.&nbsp;

In a further commitment to the building, Cult Design Founder Richard Munao has also bought one of the five terrace homes in the project. So too has DKO’s Director of Interiors &amp; Design Lead for the project, Michael Drescher. The sales highlight the deep alignment between the project’s architectural intent and its growing community of discerning owner-occupiers, including the collaborators themselves.

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Dean Lefkos, founder and director of Chapter Group which is developing Fitzroy Fitzroy, said the project is unlike any development he’s seen in terms of its buyer community.

“<a href="https://www.urban.com.au/new-apartments/fitzroy-fitzroy-411-421-smith-street-fitzroy-vic-3065">Fitzroy Fitzroy</a> is a true owner-occupier project; we’ve had best friends, siblings and even cousins purchasing homes, which is truly rare in residential projects these days," Lefkos said.

“The architecture and interiors of Fitzroy Fitzroy genuinely reflect the suburb’s character, with thoughtful design that has clearly resonated with purchasers."

Located on Smith Street and designed by DKO Architecture, Fitzroy Fitzroy sits behind a grand heritage brick facade, once home to MacRobertson’s Garage and Workshop, and reaches nine storeys high, complete with angular rooftops and a chamfered western side to create sunlit internal spaces and generous viewlines.

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Originally launching to market with 56 apartments and six terrace homes, Fitzroy Fitzroy will now be home to 52 apartments and five terrace homes following a number of amalgamations. One such purchaser is Michael Drescher, DKO’s design lead on the project, who purchased a three-bedroom apartment.

“I knew the site well, it’s a pocket of Fitzroy I’ve always admired, but it was through designing the interiors and meeting future residents 
that I knew this was a place we could truly call home,” Drescher said.

“I sensed early on that the building would foster a strong sense of community, and that feeling came to life during one of the purchaser events — everyone had the chance to meet their future neighbours, but it felt more like a gathering of old friends coming together.

“At DKO, we invested considerable time in crafting each floor plan with care. From the outset, we anticipated strong interest from owner-occupiers and particularly those already living in the area. The apartment we purchased was always one of my favourite floor plans in the project."

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Buyers will have access to resident-only amenities including the Smith Club, with communal bar and dining, private meeting and work-from-home spaces and an expansive, tranquil rooftop garden on level nine, designed by TCL.

Having met with future residents and purchasers, Drescher has developed an understanding of how the residential amenities and rooftop communal spaces will be used and is working with Cult and Chapter Group on furniture selections to suit.

At ground level, an internal laneway connects Smith Street to the residents’ lobby, inspired by the local arcades in Melbourne’s CBD, with Cult’s future corner showroom to be located behind the existing brick facade, with large windows opening onto both Smith Street and Leicester Street.

Limited apartments remain, ranging from $720,000 to over $4 million. Three yet-to-be-released sub-penthouses will launch to market in spring.

[smartcode_project_cta:default project_id=14394]

Dean Lefkos, founder and director of Chapter Group which is developing Fitzroy Fitzroy, said the project is unlike any development he’s seen in terms of its buyer community

Cult Design takes commercial and retail space at Fitzroy Fitzroy as founder buys into project

The prolonged growth in the Brisbane unit market is becoming quite remarkable.

Unit values rose another 1.1 per cent in July, according to Cotality's latest Home Value Index. They are now over 10 per cent up over the last 12 months, and making it the best performing capital city unit market in the country, just head of Perth and Adelaide. Over the same period, Sydney unit values have seen now growth, and Melbourne units have decline 0.8 per cent.

What makes the continued growth in 2025 remarkable is how well the unit market is performing after 2024, when it grew by over 16 per cent, growth not seen over a calendar year since the 1980s.

The median unit value in Brisbane is now $727,000, the second most expensive capital city unit market in the country, only behind Sydney's $868,000 median.

With strong fundamentals including low supply, growing consumer confidence, rate cut tailwinds, and the anticipation building for the 2032 Summer Olympics, there's no suggestion Brisbane’s unit market won't continue to see strong growth.

<h2>What happened in Brisbane’s off the plan apartment market in July?</h2>

Developers are looking at any opportunity to get into the Brisbane apartment market.

Veteran builder John Kearney, who runs the successful development company Immerse Projects on the Gold Coast, secured a site in Toowong for his debut Brisbane apartment development.

It’s a location filled with nostalgia for Kearney, who studied at the nearby University of Queensland.

"It feels like a full circle moment," Kearney told Apartments.com.au.

“I spent many nights at the Regatta Hotel just down the road — as have most people in Brisbane. It’s one of the city’s most well-known hotels, and with several cafes, restaurants, and a CityCat stop nearby, it’s become an even more attractive place to live.”

He also noted the opportunity to take advantage of significant view corridors from the new development site: across Toowong Memorial Park, north to the city, and east along the Brisbane River.

Read more: <a href="https://www.apartments.com.au/news/qld/first-look-immerse-projects-moves-into-brisbane-apartment-market-with-toowong-site-acquisition">First look: Immerse Projects moves into Brisbane apartment market with Toowong site acquisition</a>

National developer Fortis has also been in acquisition mode, filing for two new apartment developments in Hamilton and New Farm.

They are seeking to develop a boutique block of 12 on Hamilton's Racecourse Road (below), and 74 apartments on New Farm's dress circle Bowen Terrace.

<img alt="Fortis doubles down on Brisbane, files boutique apartment plans on Hamilton's Racecourse Road" data-entity-type="" data-entity-uuid="" src="https://res.cloudinary.com/dz9xllyip/image/fetch/f_auto,c_limit,w_1440,q_auto/https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/field/image/Racecourse_Hero_01.jpg?VersionId=tFCZcfOm_N9P7FqmhX9ViXj_EF_5EQ_u" />

They've had <a href="https://www.apartments.com.au/architects/koichi-takada-architects">Koichi Takada Architects</a>&nbsp;design the Hamilton project, which is part of a wave of new development that will uplift Racecourse Road.

Read more: <a href="https://www.apartments.com.au/news/qld/fortis-doubles-down-on-brisbane-files-boutique-apartment-plans-on-hamiltons-racecourse-road">Fortis doubles down on Brisbane, files boutique apartment plans on Hamilton's Racecourse Road</a>

More apartments are coming to West End, with Zen Group securing approval for a 200 climate-responsive apartments on <a href="https://www.apartments.com.au/new-apartments/24-duncan-street-west-end-qld-4101">Duncan Street</a>.

The two 17-storey towers will have a mix of one-, two-, and three-bedroom apartments.

<img alt="200 &quot;climate-responsive&quot; apartments set for West End as Zen Group given green light" data-entity-type="" data-entity-uuid="" src="https://res.cloudinary.com/dz9xllyip/image/fetch/f_auto,c_limit,w_1440,q_auto/https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/field/image/Duncan%20Street%20pers.png?VersionId=nmW9L.fBmBQSq_9OKGMUvFkSA2NZek20" />

Designed by <a href="https://www.apartments.com.au/architects/bettspartners">Betts + Partners</a>, the development is grounded in a climate-responsive and contextually sensitive approach, aiming to reinforce the emerging identity of the West End Riverside South precinct.

The project includes a 2,600 sqm rooftop offering a comprehensive suite of resident amenities: three pools, a fitness centre, cinema room, private dining rooms, lounges, a library, and wellness facilities including hot and cold plunge pools, pilates, a sauna and a contemplative garden.

Read more: <a href="https://www.apartments.com.au/news/qld/200-climate-responsive-apartments-set-for-west-end-as-zen-group-given-green-light">200 "climate-responsive" apartments set for West End as Zen Group given green light</a>

There was a rare new launch of apartment in July, in the heart of the Brisbane Olympic precinct. <a href="https://www.apartments.com.au/developers/keylin-group" target="">Keylin</a>&nbsp;has started taking sales at&nbsp;<a href="https://www.apartments.com.au/new-apartments/oria-spring-hill-447-gregory-terrace-spring-hill-qld-4000">Oria Spring Hill</a>, located across the road from Victoria Park, the heart of the Games.

<a href="https://www.apartments.com.au/new-apartments/oria-spring-hill-447-gregory-terrace-spring-hill-qld-4000">Oria</a>&nbsp;will comprise 132 residences across 15 levels in an elevated position on Gregory Terrace, directly opposite Victoria Park, the future site of the Games.

Leaning into its Olympic location, Keylin is introducing unique amenities that cater to changing lifestyle requirements.

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Much like the shift developers made during the pandemic to include study nooks and multi-purpose rooms in response to the work-from-home trend, Keylin has responded to the growing popularity of pickleball. Oria will feature a proposed private pickleball court as part of its facilities, one of the first courts in a new residential development across the country.

Keylin understood the prime value of this location long before the announcement that Victoria Park would be the heart of the 2032 Summer Olympics.

The address at 447 Gregory Terrace provides residents with easy access to major transport links, universities, and hospitals. Keylin has already commenced construction on Oria, which is being delivered by builder CoStruct.

Read more: <a href="https://www.apartments.com.au/news/qld/keylin-group-launches-oria-in-victoria-park-spring-hill-olympic-precinct">Keylin Group launches Oria in Victoria Park, Spring Hill Olympic precinct</a>

City Beat July 2025: Brisbane's supercharged unit market continues to boom

Property Investors

EXPERT OPINION

It&rsquo;s time we stopped treating first-home buyers as a protected species and considered the importance of other cohorts in the housing market.

It&rsquo;s become a kneejerk response in mainstream media to cry outrage whenever property prices rise, with concern for first-timers as the justification for strident headlines.

Media seems to never tire of the &ldquo;young Aussies have been priced out of the market&rdquo; storylines. I have a database of articles going back decades showing that this theme has been bashed by media constantly over the years.

The current claims that young adults are doomed to lifetime of renting are a replay of the headlines from last month, last year, two years ago, five years ago, 10 years ago and indeed 20 years ago.

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Were they justified and accurate, the past 18 months would not occurred. Over the past year and a half, we&rsquo;ve seen record buying activity by first-home buyers.

The spectacular price growth seen in that period has been driven, not by investors, but by first-home buyers and other owner-occupier buyers. Helped by a high level of government assistance, they have pumped up demand at a time of low supply, hence the big price rises.

Rising prices make it harder for first-timers to get into their local markets, but otherwise there&rsquo;s never been a time when they&rsquo;ve had so much in their favour.

There are multiple federal and state schemes provided easy access to finance, cash hand-outs and special concessions on costs like stamp duty. The low level of mortgage rates is a bonus.

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Australia is already doing all that it needs to do to smooth the path for budding young buyers.

Beyond that, how about some consideration for other types of buyers.

What about second-time buyers? Consider this scenario: a young couple buys a small apartment as their first home &ndash; it&rsquo;s affordable, well located and suits their lifestyle.

Then they decide to start a family and they need to upgrade to a larger dwelling. For most, this means selling the existing home and buying something more appropriate.

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They&rsquo;re still young, aspirational Aussies seeking to navigate the property minefield of high competition, low supply, rising prices and prohibitive buying/selling costs. But what assistance does this country offer them? The answer is: nothing.

Once they&rsquo;ve bought that first home, they cease to be worthy of consideration or assistance. They&rsquo;re on their own.

So, what about down-sizers? Older Australians rattling around in the family home, with the kids grown and out in the world. The family home is now inappropriate to their needs &ndash; it&rsquo;s too big and it costs time, energy and money to maintain. Ideally, that older couple or individual would like to downsize &ndash; sell the big house and buy a comfortable low-maintenance apartment perhaps.

Many older Australians would like to take that step and we keep hearing politicians encouraging them to do so, to free up those big homes for young families.

But many don&rsquo;t take that step. Why not? Because the costs are prohibitive.

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Selling a home and buying another can easily cost $50,000, $100,000 or more in stamp duty, agents&rsquo; commissions, legal fees, relocation costs and more. When you&rsquo;re retired or approaching retirement, those costs are deal-breakers.

I&rsquo;ve considered making the downsizing decision myself. I won&rsquo;t be doing it any time soon because the costs are ridiculous.

Politicians urge older Australians to make this move, but how much assistance is provided by them in terms of easing the cost burdens? Exactly zero.

And how about some incentives for investors to get active in the market. We have a chronic shortage of rental properties in most locations across Australia because of a series of measures by politicians and bureaucrats over the past 5-6 years that have massively discouraged investors. Australia needs to change course and encourage investors to buy homes and make them available for rent.

We don&rsquo;t need to stop the world and reorganise how our markets work because potential first-home buyers are having a whinge about how tough things are for them. They already have huge levels of government assistance available to them.

Rather, we should be considering ways to help other cohorts in the housing markets who are equally worthy of assistance. 
&nbsp;

It’s become a kneejerk response in mainstream media to cry outrage whenever property prices rise, with concern for first-timers as the justification for strident headlines

terryryder

The first home buyer conundrum and why other buyer segments matter: Hotspotting's Terry Ryder

Investors and first home buyers have both been attracted to Spring St, the newest mixed-use development slated for Box Hill.

The low price point in the project, the first in Box Hill designed by the renowned architecture firm Elenberg Fraser, has both investors and first home buyers on alert, with the latter given the opportunity to get on the ladder in an apartment tower at the centre of everything.

Prices start from a low $395,000 for one-bedroom apartments and $545,000 for two-bedroom apartments, both well below Melbourne&#39;s median of $610,000, calculated by CoreLogic.

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That median value has soared over 2021, having started the year at $576,000. Growth so far in the calendar year has been around 5.6 per cent.

There&#39;s predicted to be continued growth in Melbourne&rsquo;s apartment market, due to its current under-supply in apartments and the return of overseas migration, with both overseas renters and investors playing a major role in driving growth.

Spring St isn&#39;t due for completion until 2024, which gives buyers the opportunity to see the capital gains before the apartment is even finished.

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So far the location of Spring St, on the corner of Spring and Nelson Street, has been one of the most attractive aspects for prospective buyers.

Set in a quiet and leafy area in the bustling heart of Box Hill, Spring St provides convenient public transport, with the 109 tram, trains and buses nearby, as well as local shops and cafes. The ground level of Spring St will also home a number of retail and dining options.

Within a few hundred metres is the Box Hill RSL and Bowls Club, which meets Box Hill Gardens, a one kilometre urban park with sports courts, a running track, barbecue areas, ponds, and a playground.

Box Hill Central is a short walk, as are educational institutions for all ages, including Mont Albert Primary, Our Lady of Sion College, and Box Hill High.

The impressive amenity list at Spring St has also attracted those keen to own and occupy.

The development of 312 apartments will feature a 25 metre pool with spa, a sauna, gym, and a yoga room.

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There will be a games lounge and two entertainment suites, as well as a private dining room with a kitchen, available to book by residents.

Landscaping was a key part of the design, with Tract Consultants creating two outdoor communal spaces, an outdoor garden on the third level podium, and a rooftop garden on level 26.

[smartcode_project:default project_id=100675 project_image_fid=170528]

The generously sized apartments start from 52 sqm for the one-bedroom apartments, with a further eight sqm of balconies. The average size of one-bedroom apartments in Melbourne is sub-50 sqm.

Spring St&rsquo;s apartments will feature stone bench tops in the kitchen, and floor-to-ceiling glass windows in the living area to maximise the views high above Box Hill Gardens, to the Melbourne CBD, and as far as Mount Dandenong.

Spring St isn't due for completion until 2024, which gives buyers the opportunity to see the capital gains before the apartment is even finished

Why Spring St, Box Hill apartments are attracting both first home buyers and investors

Investor lending went up in May, according to the latest monthly data from the Australian Prudential Regulation Authority, but the growth rate was down on the prior wo months.

Strong growth in owner-occupied lending continued with a jump of 0.9 per cent.

Investor lending increased by 0.1 per cent (or $900 million) in May, down on April&#39;s growth rate of 0.3 per cent ($2.1 billion) and March, when it increased by 0.2 per cent ($1.6 billion).

<img alt="" height="519" src="https://s3-ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/pictures/article-images/rba_housing_charts.jpg" width="1200" />

Westpac had the largest rise in the owner-occupied portfolio to $236.9 billion in May but its investor loan portfolio dipped to $177 billion.

The CBA was the next biggest lender to investors with a $161 billion loan book, the the NAB at $100 billion and ANZ at $87 billion. The largest lender outside the big four was Macquarie at $27 billion and Bendigo &amp; Adelaide Band at $15 billion.

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APRA said &quot;the recent sustained growth in home lending continues to reflect robust borrower demand&quot; underpinned by record-low interest rates, government measures supporting first home buyers (such as the First Home Loan Deposit Scheme), and new home building, as well as an optimistic employment outlook.

APRA figures for May show a slowing in investor borrowing

jchancellor

May sees reduced growth in property investor lending: APRA

<html><body>
EXPERT INSIGHT

Investors have clearly now joined the stampede of buyers rushing housing markets, but the overall home loan market share of investors remains at record low levels, offsetting any concerns by the RBA and financial regulators of potential market disruption.

The ABS reports that the value of national investor lending seasonally adjusted increased by 9.4% over January to $6.4bn which is the highest monthly total recorded since May 2018.

Despite the sharp increase, the overall home loan market share of investors fell to a new record low 19.1% and well behind the long-term average of 33.1%. Recent growth in investor lending still lags the remarkable increases reported by owner-occupiers and first home buyers.

During the similar strong market conditions in 2014, investor market share exceeded 40% which resulted in actions by financial regulators to subdue activity from this group. 

This reflected concerns that record levels of highly-leveraged investors may cause disruptions to housing markets in the event of an increase in official interest rates pushing down home prices.

WA reported the sharpest increase in monthly investor lending over the past year, rising by 47.2%, followed by QLD up 26.7%, NSW up 17.9% and SA up 0.4%. Monthly investor lending in VIC however fell 1.0% over the past year.

NSW accounted for the most investor activity over January with 40.9% of total national activity with $2.21bn in loans approved followed by VIC well behind with $1.47bn, QLD $0.89bn, WA $0.34bn and SA $0.24bn.

The average NSW investor loan reported over January was the highest of all the states at $658,900 followed by VIC 537,388, QLD $441,037, WA $411,649 and SA $368,232.

Although investor lending is on the rise, the overall residential loan market share remains at record low levels with current strong prices growth clearly driven by unprecedented owner-occupier lending activity.

Any misguided move to raise interest rates to quell strong buyer activity would clearly place in jeopardy the current fragile and nascent economic recovery – something the RBA has clearly acknowledged.”

Dr Andrew Wilson is the chief economist at Archistar
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investors have joined the stampede of buyers rushing housing markets: Archistar's Andrew Wilson

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Expert Observer

The standout feature of the behaviour of our politicians is the degree to which they are out of touch with their constituents and the impact of the decisions they make.

In the real estate sphere, the most startling recent example was the knee-jerk decision-making of state and territory governments in favour of pandemic-affected tenants, without any regard for the impact on the mum-and-dad households who own an investment property.

Equally, our elected representatives collectively appear oblivious to the rental shortage crisis that exists in most (not all) locations across the nation.

The situation has become dire in many parts of Australia, with queues of prospective tenants showing up at open houses and candidates offering more than the asking rent and/or offering to pay six or 12 months in advance to beat the competition.

Here’s the current situation …

According to the monthly report from SQM Research, vacancy rates in our already-tight rental markets fell in six of the capital cities and were unchanged in the other two in January.

The national average vacancy rate fell from 2.2% in December to 2% in January, but five capital cities – Perth, Adelaide, Canberra, Darwin and Hobart – all have vacancy rates below 1%, while Brisbane sits at 1.7%.

[smartcode_project:default project_id=8240]

Throughout regional Australia, many centres have vacancy rates below 1% in what represents a national rental crisis for people seeking tenancies. It’s common to find regional locations where the vacancy rate is closer to zero than to 1%.

Keep in mind the industry benchmark is that vacancy rates below 3% represent a shortage of rental properties. Below 1% is a dire situation.

The two biggest cities, where vacancies are highest, showed marked improvements in January, with Sydney falling from 3.6% in December to 3.2%, and Melbourne falling from 4.7% to 4.4%.

SQM CEO Louis Christopher says the figures provide more evidence the worse is over for landlords in the Sydney and Melbourne rental markets. 

He says: “The falls in vacancy rates for the month in those two cities, combined with the increased tightness in other cities and regions, has now brought rental vacancy rates down to below where they were prior to the outbreak of Covid19.”

Christopher says the data, overall, suggests that 2021 will remain largely a tenant’s market in the inner-city areas of the biggest cities “but will also very much remain a landlord’s market for regional Australia”. It would add to that the smaller capital cities – as shown earlier, six of them have ultra-tight rental markets. 
He also notes that rents for both houses and units have risen in the capital cities, on average, over the past month.

In annual terms, the national average is a 10% rise in house rents and a 4% increase in apartments rents.

The growth has been higher in regional markets than in the capital cities, with Sydney and Melbourne rents still lower on average than a year ago.

But there have been strong rises in Perth, Canberra and Darwin.

[smartcode_project:default project_id=22017]

In Perth, rents have risen 11.5% for houses and 12.3% for apartments, while in Darwin house rents have increased 27% in 12 months. In Canberra rents have risen around 6% for both houses and units.

The repercussions are spreading well beyond the immediate participants, tenants and landlords. Businesses in regional areas are struggling to find the workers they need because people interested in taking the jobs on offer can’t find anywhere to rent in those areas.

So what are our elected representatives doing about that? Essentially, nothing. They give the impression that aren’t even aware of the problem. This situation is just not part of the national discussion.

Partly mainstream media is to blame. Our major newspapers, especially the Fairfax ones, have been focusing their coverage on the few places in the nation that have high vacancies, specifically inner-city Melbourne and inner-city Sydney and creating the impression that we have an over-supply of dwellings – which is laughable.

[smartcode_project:default project_id=6201]

Federal Labor, if they had their way, would make matters worse by scrapping negative gearing, which would be a huge disincentive to investors.

What we need is the opposite – measures to encourage people to buy investment properties and make them available for rental. Rental vacancies are an outcome of the activity of investor buyers – and their absence in recent years is a chief reason we have this crisis.

HomeBuilder is helping the situation by encouraging the creation of new dwellings, but more needs to be done.

If politicians want to help tenants, they need to encourage landlords – instead of treating property investors (most of them ordinary mum-and-dad households) as a criminal class.

Terry Ryder is the founder of hotspotting.com.au

ryder@hotspotting.com.au

twitter.com/hotspotting
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According to the monthly report from SQM Research, vacancy rates in our already-tight rental markets fell in six of the capital cities and were unchanged in the other two in January.



Mum and dad investors hit by favourable COVID-affected tenant rules: Hotspotting's Terry Ryder

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The lower dollar continues to work away on Arrivals and Departure trends, with a further +1.8 per cent seasonally adjusted increase in the number of short term arrivals in November, and a -2.8 per cent decrease in the equivalent number of departures.  
The monthly ratio of short term departures this continues to decline, which will act as a twin boost for the domestic economy.
<img class="aligncenter img-responsive" src="https://2.bp.blogspot.com/-b73svb4ZFPU/VpUnsI93FyI/AAAAAAAAak0/7_yWcorhIAA/s640/A2.jpg" alt="" width="640" height="320">
The labour market is not presently strong enough to warrant the exceedingly high level of net permanent and long term immigration seen in 2013 of above 400,000.
The rolling annual figure is now seemingly getting set to stabilise – in November the rolling annual total ticked down slightly from 278,200 to 277,600, with the decline being felt most keenly in the resources states and the regions, as opposed to the largest capital cities.
 
<img class="aligncenter img-responsive" src="https://3.bp.blogspot.com/-O7WpgUtq3xE/VpUnsHJlouI/AAAAAAAAaks/zY07p-aR25M/s640/A1.jpg" alt="" width="640" height="322">
 
The most recent <a href="https://petewargent.blogspot.sg/2015/12/students-to-drive-population" target="_blank">forecasts</a> from the Department of Immigration &amp; Border Protection (DIBP) show that the population growth rebound for the remainder of this decade will be driven by international students rather than by immigrants on 457 or permanent resident visas.
<h4>RECORD CHINESE TOURISM</h4>
The annual number of short term arrivals into Australia surged to a new record high of 7.36 million in November.
There have been significant increases in the number of visitors from India (+19 per cent) and the United States (+9 per cent) over the past year, Americans doubtless encouraged by favourable shifts in the exchange rate.
There can no doubting the key trend here, however, which has been the vast +17 per cent increase in the number of visitors from China, Hong Kong and Taiwan to 1.36 million.
The pace and scale of the increase over the past decade has been breathtaking, as documented regularly on this blog.
 
<img class="aligncenter img-responsive" src="https://4.bp.blogspot.com/-7I2RT3jAbrU/VpUns-kh5eI/AAAAAAAAak4/zg5drP4jalk/s640/A4.jpg" alt="" width="640" height="328">
For the first time China alone accounted for more than 1 million visitors in the year to November, and make no mistake, Chinese tourists spend up big when they come to Australia.
<h4>STUDENTS</h4>
A record 3.38 million persons came to Australia for a holiday over the year, while for the first time this year more than 2 million cited there reason for journey as “visiting friends and relatives”, reflective of Australia’s status as a country built on immigration.
 
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The other key trend to watch this year is the explosion in the number of international students, not least because following a streamlining of the acceptance rules so many are expected to go on to become permanent residents on other visas.
This data series confirmed that the rolling annual number of education arrivals jumped by an unprecedented +71,200 or +18 per cent to 464,600 in the year to November.
 
<img class="aligncenter img-responsive" src="https://3.bp.blogspot.com/-ZSAHnIJp5Ec/VpUns7Fo29I/AAAAAAAAak8/Bhsg-ejlFSg/s640/A5.jpg" alt="" width="640" height="312">
 
Most students are projected to be accepted into the large capital cities.
Pete Wargent is the co-founder of AllenWargent property buyers (London, Sydney) and a best-selling author and blogger.
 
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How the dollar is driving demographic trends for property investors: Pete Wargent

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Over recent years the level of investor participation in the national housing market has hit historic high levels and at the same time, housing finance commitments to owner occupier first time buyers has shrunk. 
As an example, January 2017 housing finance data shows that based on the total value of housing finance commitments, a record-low 7.1% of commitments were to owner occupier first home buyers while 39.0% of the value of all commitments were to investors.
Click to enlarge
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/03/24/chart-1-2.jpg" alt="">
The above chart looks at the proportion of the total value of housing finance commitments going to owner occupier first home buyers and investors nationally.  As the level of lending to investors has increased over recent years it has done so at the expense of owner occupier first home buyers. 
Except for briefly in 1992, investors have consistently outweighed owner occupier first home buyers in terms of housing finance demand.  The only time first home buyer lending has got close to that of investors was in 2008 and 2009 during the financial crisis. 
At that time, investors were fearful and first home buyers were receiving substantial stimulus from the Federal Government which led to heightened housing demand to those that don’t already own property.
It is a similar story surrounding first home buyer activity being much lower than that of investors across the individual states and territories.  Furthermore, in 2008 and 2009 the combination of stimulus and investor caution resulted in a lift of first home buyer activity at the expense of investors. 
The data here has been paired between housing finance and lending finance data.  We have multiplied the average first home buyer loan size by their number of loans to determine the value of first home buyer loans and taken the investor loan data from lending finance.  Note that the following figures include refinances.
<a href="https://www.propertyobserver.com.au/images/2017/03/24/chart-2-3.jpg" target="_blank">Click to enlarge</a>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/03/24/chart-2-3.jpg" alt="">
In January 2017, an historic low 3.4% of all housing finance commitments in New South Wales were to owner occupier first home buyers compared to 46.9% of total lending to investors. 
The 46.9% of housing finance commitments to investors was their highest level since July 2015.
<a href="https://www.propertyobserver.com.au/images/2017/03/24/chart-3-3.jpg" target="_blank">Click to enlarge</a>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/03/24/chart-3-3.jpg" alt="">
Victorian investors accounted for 37.5% of the total value of housing finance commitments in January 2017 compared to 7.7% of the total value to owner occupier first home buyers.  The level of activity from first home buyers is currently at an historic low level while investor participation is sitting at levels not seen since July 2015.
<a href="https://www.propertyobserver.com.au/images/2017/03/24/chart-4-3.jpg" target="_blank">Click to enlarge</a>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/03/24/chart-4-3.jpg" alt="">
Owner occupier first home buyers are more active in Queensland than they are in New South Wales or Victoria however, they still only accounted for 10.8% of the value of housing commitments in January 2017 compared to investors accounting for 31.6%.  Housing affordability has not deteriorated in Queensland to the extent it has in New South Wales and Victoria however, first home buyers continue to be well and truly outnumbered by investors.
<a href="https://blog.corelogic.com.au/wp-content/uploads/2017/03/chart-5-2.jpg" target="_blank">Click to enlarge</a>
<img class="aligncenter size-full wp-image-8414" src="https://blog.corelogic.com.au/wp-content/uploads/2017/03/chart-5-2.jpg" alt="" width="1685" height="596">
In January 2017, owner occupier first home buyers in South Australia accounted for 6.9% of the value of housing finance commitments compared to investors accounting for 30.1%.
<a href="https://blog.corelogic.com.au/wp-content/uploads/2017/03/chart-6-1.jpg" target="_blank">Click to enlarge</a>
<img class="aligncenter size-full wp-image-8415" src="https://blog.corelogic.com.au/wp-content/uploads/2017/03/chart-6-1.jpg" alt="" width="1687" height="599">
Owner occupier first home buyers in Western Australia accounted for 14.3% of the total value of housing finance commitments in January 2017 compared to investors that accounted for 27.3%.  Dwelling values are falling across most regions of the state and investor borrowing still far outweighs first home buyers. You would think that falling prices would scare investors away from purchasing and create an opportunity for first home buyers but that hasn’t really occurred in Western Australia over the past few years.
<a href="https://blog.corelogic.com.au/wp-content/uploads/2017/03/chart-7.jpg" target="_blank">Click to enlarge</a>
<img class="aligncenter size-full wp-image-8416" src="https://blog.corelogic.com.au/wp-content/uploads/2017/03/chart-7.jpg" alt="" width="1688" height="603">
In January 2017, owner occupier first home buyers in Tasmania accounted for 10.3% of total housing finance commitments compared to investors that accounted for 27.6%.  The proportion of lending to investors in Tasmania is at its highest level since April 2015.
<a href="https://blog.corelogic.com.au/wp-content/uploads/2017/03/chart-8.jpg" target="_blank">Click to enlarge</a>
<img class="aligncenter size-full wp-image-8417" src="https://blog.corelogic.com.au/wp-content/uploads/2017/03/chart-8.jpg" alt="" width="1706" height="603">
Northern Territory investors accounted for 38.8% of the value of all housing finance commitments in January 2017 compared to owner occupier first home buyers who accounted for 8.3%.  Despite the fact that dwelling values are falling across most of the Northern Territory, fist home buyer volumes remain low and investors remain quite active.  This is probably due to the fact that in Darwin in particular, the population tends to be more transient than in other parts of the country.
<a href="https://blog.corelogic.com.au/wp-content/uploads/2017/03/chart-9.jpg" target="_blank">Click to enlarge</a>
<img class="aligncenter size-full wp-image-8418" src="https://blog.corelogic.com.au/wp-content/uploads/2017/03/chart-9.jpg" alt="" width="1687" height="602">
Across the Australian Capital Territory in January 2017, 9.1% of the total value of housing finance commitments was to owner occupier first home buyers compared to 35.5% to investors.
The national and individual state and territory data shows that historically the only way to substantially boost first home buyer participation has been at the expense of investors, as occurred in 2008/09.  At the time this didn’t occur through a policy specifically targeted at slowing investor demand it happened more so organically due to significant first home buyer stimulus and investor fears at the time.  Keep in mind that these policy choices also led to, in certain areas, a substantial increase in dwelling values.
Including in 2008/09, investors have consistently outweighed owner occupier first home buyers in terms of new mortgage borrowing. 
This shouldn’t really surprise anyone given that most investors already have a residential property asset and many of which use at least a portion of the equity in that asset to fund the investment.  First home buyers don’t have the existing foothold in the housing market and are always going to find it difficult to compete with borrowers that already have assets and equity. 
Unfortunately the ABS does not publish data on the number of loans to investors so we can’t see a true picture of loans written rather just the value lent.  Keep I mind that investors that already own homes generally have the ability to borrow more than first home buyers and in-turn may typically take out larger loans than first home buyers.
Based on the data is seems that the way to get more first home buyers entering into the market is to do it at the expense of investors.  If you can increase purchasing by first home buyers there will be, at least initially, less demand for rental accommodation. 
Longer-term though, the population grows and people age so deterring investment may have greater repercussions for the housing market. Keep in mind though that heightened housing market activity from first home buyers that don’t own housing assets and have no housing equity may actually create more instability in the housing market.
There is no easy fix to encourage higher levels of housing market participation from first home buyers but the data indicates a heightened level of activity from this market segment is most likely to occur via a reduction in demand from the investor segment.   While people that don’t already own homes may see this as a great solution we should be cautious as it may have larger long-term effects on housing supply and housing market stability. 
I don’t believe that the balance between first home buyers and investors is currently right and we should look at ways to cool some of the market’s current investment exuberance but we should also be cautious about encouraging excess demand from first home buyers who may find it more difficult to repay mortgages once interest rates start to increase.
Cameron Kusher is research analyst for CoreLogic. You can contact him <a href="https://blog.corelogic.com.au/about/">here</a>.
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Investors historically outweigh first home buyers but gap widens: Cameron Kusher

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There are tax issues for Australians living overseas but who want to buy property back home.
It in important the familiarise themselves with Australian tax obligations to avoid nasty surprises from the ATO.
Among the first things to establish is the tax residency status. They will be treated as tax resident of Australia if they meet certain criteria.
Some of the things that determine residency include nationality, where you were present and for how long, where you have a home, and your economic and business ties with the country. 
If you have stayed in Australia for more than six months of the financial year (1 July to 30 June), you will be a tax resident of Australia.
Then there's the domicile. If your domicile remains in Australia and you do not have a permanent place of residence overseas, you will be treated as an Australian tax resident.
If you are a tax resident of Australia, your worldwide income and capital gains are generally subject to Australian tax.
For non-residents, only income earned in Australia and capital gains on ‘Taxable Australian Property’ are taxable in Australia. Any income or capital gain from a property in Australia will always be treated as having been sourced in Australia, hence taxed.
Also watch out for countries with Double Tax Agreement (DTA) with Australia, where the provisions of the DTA may override the domestic law in both Australia and the other country.
If the other country also taxes the same income or capital gain, Australian tax rules generally provide a foreign income tax offset on any foreign tax paid on the same income or capital gain.
There is no substitute for professional tax advice.
Take the common example of an Australian expatriate who buys a home back in Australia while still resident of another country, including for tax purposes.
The house rented until the expat eventually returns to Australia, when it will become the family’s home.
The capital gains tax (CGT) treatment when the home is eventually sold will be influenced by the length of time when the property was not the expat’s main Australian residence.
An expat’s CGT position after owning the property for 10 years but home for only the final two of those years, would, according to Joe Galea, property tax partner for accountants Deloitte in Sydney, see a fifth of any net capital gain taxable.
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Australian expatriates are to watch their tax obligations

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For your next investment property, no doubt you’ll be researching different locations and property types. But which of these two factors is more important when it comes to property investing? 
Every major Australian city has hundreds of suburbs to research when buying an investment property. 
On top of that, there is a large range of property types to choose from: apartments and flats, villas and townhouses, stand-alone dwellings, development sites, vacant land etc. 
With so many options, it can be hard to figure out what to prioritise: should you focus on a property type and research to find the suburb that maximises returns for your chosen type, or do you research to find the best location and then decide on the best property type for that location? 
The answer to that question is not straightforward and will depend on your property investment goals. For most investors, the end goal is to create substantial personal wealth. 
If wealth creation is the main objective, typically location trumps property type as the most important aspect to consider. However, that doesn’t mean type isn’t important. It means that the type to focus on will be a consequence of the location you’ve selected. After all, a location may only make a good investment if you hold the right property type in that location.
Let us illustrate this. Bart is an investor looking for capital growth, and as such, has focused on location over property type. He found a location that ticks all the boxes, and is now deciding between two types available on the market: an older, stand-alone dwelling on a large block with development potential or a brand new apartment in one of the many apartment complexes that are popping up everywhere in the suburb.   
Generally, the house on the large block of land would make the better investment thanks to its large land component, which will continue to appreciate more and more as land becomes scarcer. If Bart selects the apartment, he would have to deal with increasing competition for this type in the area, which means he’d be competing with other apartments for tenants resulting in lower rentals returns. Further to that, the continued construction of new apartments will mean that there is always a large supply of similar stock on the market, which puts downwards pressure on his apartment’s value. 
If, on the other hand, Bart’s risk appetite was low and he was financially more constrained, he would have prioritised finding a neutral or positive cash-flow property and might have focused on a different type in a different location all together.
The main thing to take away from this is that when evaluating your chosen location and property type, you must always take into consideration your unique circumstances, which will entail your financial capacity, risk tolerance and life circumstances.
For more insight into the do’s and don’ts of property research, download your free copy of our latest ebook: <a href="https://wvw.momentumwealth.com.au/ResearchEbook?utm_source=Property+Observer&amp;utm_medium=Ebook&amp;utm_campaign=Ebooks" target="_blank">”How to find investment-grade properties using professional research principles”. </a>
<a href="https://wvw.momentumwealth.com.au/ResearchEbook?utm_source=Property+Observer&amp;utm_medium=Ebook&amp;utm_campaign=Ebooks" target="_blank"> </a>
 
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jrobinson-rf4aSBido9

Location Vs property type – which is more important?

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<div>The latest <a href="https://www.abs.gov.au/ausstats/abs@.nsf/mf/3401.0/" target="_blank">Overseas Arrivals and Departures</a> data for the month of June 2015 confirmed that population growth in Australia will be once again be slower in this calendar year. As I argued a year ago, by the third quarter of 2014 it had become evident that the assumption reported widely in the media that the population of Australia would boom by around 2.4 million persons over the next six years was too high - much too high, in fact! <div class="separator"><a href="https://1.bp.blogspot.com/-ZK9-CCXjNWs/VcWS2tAESjI/AAAAAAAAXd0/LM0ux2QIp00/s1600/A1.jpg"><img src="https://1.bp.blogspot.com/-ZK9-CCXjNWs/VcWS2tAESjI/AAAAAAAAXd0/LM0ux2QIp00/s400/A1.jpg" width="400" height="65"></a></div>
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<div>In the event population growth slowed considerably to be up by an estimated +330,200 in 2014, and population growth will be slower again in 2015. Over the longer term we might indeed expect to see much stronger levels of population growth return for the reasons I have already explored, but for the foreseeable future lower population growth will be the new norm. Let's take a look at the implications of the latest figures in three parts. 
</div>
Part (i) - Slowing immigration nationally 
<div>The number of long term arrivals into Australia has slowed further over the past year, and consequently net long term migration has pulled back to +292,000 on a rolling annual basis, sliding from a recent peak of more than +400,000.</div>
<div> </div>
<div>This suggests that population growth in 2015 will likely slow further perhaps to around +300,000 persons from +330,200 in 2014.</div>
<a href="https://2.bp.blogspot.com/-l47JN3T3sRc/VcWZDBPOGOI/AAAAAAAAXeM/e9Bki5YjSO8/s1600/A3.jpg" target="_blank">Click to enlarge</a>
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<div class="separator">One of several key potential drivers of this trend has been the sharp reduction in the number of permanent settlers from New Zealand.</div>
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<div class="separator">Meanwhile the number of permanent settler Brits has slowed to a mere trickle - just 470 settlers in June hailed from the United Kingdom, the lowest monthly figure across the full 25 years of available data.</div>
<div class="separator"> </div>
<div class="separator">Kiwi citizens can move freely between Australia and "home" and as such are theoretically far more sensitive to shifts in labour market conditions.</div>
<div class="separator"> </div>
<div class="separator">And while spare capacity in the labour market has being rising over the past three years in Australia, it had been tightening for some time in New Zealand.</div>
<div class="separator"> </div>
<div class="separator">With mining construction activity now slowing sharply in Australia - and Christchurch in New Zealand seeing a high volume of reconstruction activity - it is perhaps unsurprising that fewer New Zealanders are making the trans-Tasman trip on a permanent footing (although a record 1.27 million still came to Australian shores on a short-term basis over the past year).</div>
<div class="separator"> </div>
<div class="separator">On the other hand the number of settlers from countries such as China and India continues to slowly but surely break new heights.</div>
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<div class="separator">Indeed, the overwhelming majority of settlers in Australia now hail from Asia, with the middle east the only other region or continent presently in a confirmed uptrend.</div>
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Part (ii) - Record visitors to Australia
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<div>There is a flip side to the softer pace of growth in Australia's economy, and that is that falling interest rates and a correspondingly weakening currency have encouraged the tourism sector to attract a record number of short term arrivals Down Under. </div>
<div> </div>
<div>This year the rolling annual number of short term arrivals blasted past 7 million for the first time to a record 7.12 million in the 2015 financial year (denoted by the blue line below).</div>
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While the corresponding drag on overseas travel by Australians has only been fairly gradual to date (denoted by the red line above), the weaker dollar also means that over time comparatively fewer Aussies will be inclined to make overseas trips, which in turn will act as a further boost for the domestic economy. 
<div>I holidayed on the Sunshine Coast myself in the past week, and it is quite evident that more Aussies are inclined to hang out in locations such as Noosa over the winter than has been the case in recent years. After all, travelling overseas is not quite as much fun as when the dollar was at sky high levels just a few years ago!</div>
<div> </div>
<div>Accordingly the ratio of short term departures to short term arrivals has steadily been trending down for the past two years.</div>
<a href="https://4.bp.blogspot.com/-7dS7i5xs8Fc/VcVDTx-uYTI/AAAAAAAAXcQ/kB4tYIqk8kg/s1600/Arr3.jpg" target="_blank">Click to enlarge</a> 
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One trend which is definitely not slowing down is the number of Chinese visitors to Australia with more than 1.25 million visitors from China, Taiwan and Hong Kong over the past 12 months, with the latest figures showing no signs of this emerging mega-trend easing off.
<div>A record 563,800 Americans have also enjoyed the dramatic shift in the exchange rate over the past year.</div>
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Furthermore there has been an explosion in the number of foreign students in Australia - also largely hailing from Asia - another trend which has in part been driven by exchange rate movements. 
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<div> </div>
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This is an emerging demographic trend which will impact Sydney and Melbourne most keenly. 
<div class="separator">The full impact of the depreciation of Australia's currency has yet to flow through to this data and we will certainly now see further short visitor records broken in the year ahead.</div>
Part (iii) - 3 implications of lower population growth
So what are the impacts of slower population growth in Australia, which could continue for the foreseeable future? 
<div>There will be many impacts, of course, but here are just three of the most prominent observations.</div>
<div> </div>
<div>Firstly, and most obviously, slower population growth will equate to lower demand for goods and services, which in turn over time should result in lower economic and employment growth. Over the next few years there will be a lower than expected requirement for investment in building offices, warehouses, housing, machinery, plant and equipment. </div>
Secondly, with employment growth having tracked at an estimated 2.1% or 243,600 new jobs over the past year - which is considerably faster than the estimated rate of population growth of just 1.4 per cent - the Reserve Bank now <a href="https://www.rba.gov.au/publications/smp/2015/aug/html/index" target="_blank" style="line-height: 1.3em;">believes</a> that the unemployment rate has likely peaked for this cycle. 
<div>Previously it had been forecast that the unemployment rate would continue rising to around 6.5 per cent, but now the unemployment rate is seen as more likely to be falling again from 2017. The darker blue shaded areas represent the Reserve's 70 per cent confidence interval.</div>
<div> </div>
<div><a href="https://1.bp.blogspot.com/-5Lzmr6uP8M0/VcV_OAii7xI/AAAAAAAAXdc/zeFRKGyrS9o/s1600/UE.jpg" target="_blank">Click to enlarge</a></div>
<div>
 <div class="separator"><a href="https://1.bp.blogspot.com/-5Lzmr6uP8M0/VcV_OAii7xI/AAAAAAAAXdc/zeFRKGyrS9o/s1600/UE.jpg"><img src="https://1.bp.blogspot.com/-5Lzmr6uP8M0/VcV_OAii7xI/AAAAAAAAXdc/zeFRKGyrS9o/s400/UE.jpg" width="400" height="387"></a></div>
</div>
<div>However, there are many regions in Australia where unemployment is still elevated or rising, particularly in resources-influenced regions and in South Australia where the trend rate of unemployment has hit 7.9 per cent and rising.</div>
<div> </div>
<div>Thirdly, with the mining investment supernova now set to implode in spectacular style, the strong rates of immigration which benefited the resources areas of regional Western Australia and regional Queensland have now ebbed away.</div>
<div> </div>
<div><a href="https://2.bp.blogspot.com/-UAU8Pw52o-w/VZsC3PaTSPI/AAAAAAAAWtQ/Ip5KWRT_itE/s640/eng2.jpg" target="_blank">Click to enlarge</a></div>
<div>
 <img src="https://2.bp.blogspot.com/-UAU8Pw52o-w/VZsC3PaTSPI/AAAAAAAAWtQ/Ip5KWRT_itE/s640/eng2.jpg" width="640" height="274"> Accordingly population growth has become more capital city focused. The most recently available data showed that Greater Melbourne and Greater Sydney alone accounted for all but half of Australia's total population growth, while Greater Brisbane and Greater Perth accounted combined for close to nearly a quarter of the total. Regional population growth on the other hand has in aggregate been been slow and slowing. As for whether the mining boom will have a second wind? Highly unlikely: that's not the way that commodity cycles typically tend to work. The Reserve Bank's Commodity Index was once again smoked by another 5 per cent on a monthly average basis in SDR terms in July to be a punishing 20.2 per cent lower over the past year. Ouch. In Aussie dollar terms the decline has been a somewhat less dramatic 8.5 per cent year-on-year, but nevertheless Australia's terms of trade (TOT) remain well above their long run average (and TOT booms have historically tended to over-shoot on the downside too).</div>
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<a href="https://1.bp.blogspot.com/-Ilkpx3lP19k/VcV_OG-p3zI/AAAAAAAAXdk/KEkm_g7X5W8/s1600/Commods1.jpg"><img src="https://1.bp.blogspot.com/-Ilkpx3lP19k/VcV_OG-p3zI/AAAAAAAAXdk/KEkm_g7X5W8/s640/Commods1.jpg" width="640" height="278"></a> 
<div>Note that it's not just iron ore and coal prices which have been hammered as demand from China and elsewhere has slowed in the face of a glut of supply. Oil, aluminium, copper and gold have all hit half decade lows in recent times, while the price of silver has tracked little better.</div>
<div>
 Slightly bizarrely - given that coal prices are well below the project's notional break even point - the Adani Carmichael Mine is one possible exception to the accelerating decline in mining investment. Some folk with the power to exert material influence evidently has the government's ear relating to this essentially unviable mega-project. Generally speaking, however, mining production is ramping up, there is heavy downward pressure on commodity prices, and ever fewer material projects have been passing viability.</div>
<div>
 Going forward population growth in Australia will follow the employment growth, which has been heavily focused on Sydney and Melbourne, and to a somewhat lesser extent Brisbane and the Gold Coast.</div>
<div>
 Indeed, over the past year more than 80 per cent of employment growth has been found in New South Wales and Victoria, and overwhelmingly in Sydney and Melbourne. </div>
<div> </div>
<div>With the Western Australian economy slowing and net interstate migration going into reverse gear, population growth will is likely to be heavily focused on the three largest capital cities - a trend which will only be exacerbated by the nascent explosion in foreign students. The Reserve Bank added its own outlook for the housing market in the latest SOMP: "Supply constraints, particularly in Sydney, may limit the extent to which new dwelling investment can satisfy growing demand, which raises the possibility that housing prices will grow more quickly than forecast.  Also, housing prices outside Sydney and Melbourne are little changed over the past year or so and may not yet have responded fully to the very low levels of interest rates."
</div>
<div> </div>
<div>
PETE WARGENT is the co-founder of <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blogger</a>. 
His latest book is <a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank" rel="nofollow">Four Green Houses and a Red Hotel</a>.
</div>
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