<p>Perth’s new apartment market recorded its strongest quarter of sales since Q4 2021, with 412 apartments sold in Q1 2026 and a record quarterly sold value of $537 million, according to Urbis’ latest Apartment Essentials results.</p>

<p>Urbis said the March quarter result reflects strong, highly product‑specific demand across both ends of the market, from more attainable projects delivering at scale, through to premium stock being absorbed by equity‑rich downsizers.&nbsp;</p>

<p>David Cresp, Partner at Urbis, said the key story in Perth is not demand, it is the market’s ability to convert demand into delivered housing.&nbsp;</p>

<p>“This is the strongest sales quarter since Q4 2021, and it reinforces that demand in Perth is real and it’s local,” David Cresp said. “But the task now is delivery, turning that demand into projects that can actually be built and completed.”&nbsp;</p>

<p>[smartcode_project:default project_id=110291 project_image_fid=302785]</p>

<h2>Affordable product leads, premium demand remains resilient</h2>

<p>Sales in Q1 were led by more affordable projects, with The Boulevard (SKS Group) recording 115 sales in the quarter, the presentation noting this is only the second time a single project has surpassed 100 quarterly sales. The project was able to offer more affordable housing product right next to a train station.&nbsp;</p>

<p>Palmyra West (Finbar) also delivered strong results with 28 sales in Q1, following 84 sales in Q4, with an average price of under $800,000, underscoring depth of demand for well‑located, attainable new stock.&nbsp;</p>

<p>At the premium end, Urbis said downsizer demand is continuing, with the results highlighting Romeo (Applecross, Finbar) recording 75 sales and reaching almost 50% sold in one quarter.</p>

<p>Jual (Shenton Park, Celsius Property) also posted a strong quarter with 28 sales, reaching 39% sold in one quarter.</p>

<p>Urbis noted that Perth apartment demand is not speculative, not investor‑led, and not uniform, describing it as localised, often equity‑driven and highly product‑specific, a pattern reflected in the polarisation between strong “attainable” performers and premium downsizer product.&nbsp;</p>

<p>[smartcode_project:default project_id=148957 project_image_fid=364102]</p>

<h2>Prices underpinned by costs, and the delivery risk is growing</h2>

<p>Urbis said pricing pressure is cost not demand‑driven: construction costs and delivery risk are now a central constraint, with the results noting build costs remain elevated and volatile, and that energy, fuel and labour uncertainty weigh on feasibility.</p>

<p>David Cresp said a growing challenge for private Build‑to‑Sell developers is simply securing a builder in the current environment.</p>

<p>“Developers are really feeling the pressure from a building market that was operating at capacity and securing a builder is challenging,” David Cresp said, adding that even where a builder can be secured, “trying to get to the price that makes the development financially viable is incredibly challenging in the current market.”&nbsp;</p>

<p>Urbis’ broader WA commentary also notes that industry remains at or above capacity with lot and housing creation, and that many builders are limiting new sales to manage stretched workforces and fixed‑price contract pressures, conditions that flow directly into apartment feasibility and delivery timing.</p>

<p>[smartcode_project:default project_id=108869 project_image_fid=317905]</p>

<h2>Supply: improving later, but still constrained, and Perth lags eastern benchmarks</h2>

<p>While near‑term supply remains constrained, Urbis’ forecast shows completions lifting “Supply is forecast to be back above 1,500 apartments per annum for the first time since 2019”, with 1,775 completions forecast for 2026, and volumes remaining above that level over the following years.&nbsp;</p>

<p>Looking further ahead, completions are forecast to reach 2,500 in 2028, with the report noting 32% of that total is social/affordable, reflecting the role of government‑supported delivery in rebuilding the pipeline.&nbsp;</p>

<p>However, Urbis said Perth remains behind comparable markets on pipeline scale. In a national comparison of projects under construction, the report shows under construction Perth Build‑to‑Sell (BTS) at 3,446 apartments versus the Gold Coast at 7,922. Mr Cresp said “The challenge for Perth is how to we grow the delivery pipeline”.</p>

<p>Urbis’ conclusion is that Perth’s market is increasingly defined by product discipline and delivery certainty, with the research identifying “delivery certainty is key” and calling out builder risk and procurement models as core success factors, alongside “timing and staging”.&nbsp;</p>


Joel Robinson

Perth apartment sales hit strongest pace since late 2021 as builder capacity tightens

<p><a href="https://www.apartments.com.au/developers/sammut-developments">Sammut Group</a> has secured development approval for its latest Brisbane apartment project, marking the Sydney developer’s next step in expanding its Queensland pipeline following the success of its debut Gold Coast development, Coast.</p>

<p>The approved project at <a href="https://www.apartments.com.au/new-apartments/44-glen-road-toowong-qld-4066">44 Glen Road, </a><a href="https://www.apartments.com.au/developments/toowong-qld-4066">Toowong</a> will deliver a 15-storey riverfront apartment building with 42 residences, significantly increasing the scale of the site’s previous approval for a smaller luxury scheme. Designed by Bureau^proberts, the development will comprise a mix of predominantly four-bedroom and two-bedroom apartments positioned to maximise Brisbane River and city views.</p>

<p>Sammut Director Julian Sammut said the group had been actively searching Brisbane for several years before identifying Toowong as the right fit.</p>

<p>“Brisbane was the right step for Sammut,” Sammut said.</p>

<p>“With the success of Coast we thought we should definitely look to do more in Queensland alone. We then pushed up to look at Brisbane. We've been looking for I'd say two to three years actually and it was hard to find the right location.”</p>

<p><img alt="Sammut makes Brisbane apartment play" data-entity-type="" data-entity-uuid="" src="https://res.cloudinary.com/dz9xllyip/image/fetch/f_auto,c_limit,w_1440,q_75/https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/field/image/Screenshot%202025-12-23%20at%203.27.14%E2%80%AFPM.png?VersionId=dYAVIL7qdcGA8ojvkslSrLjczXFejSSx" /></p>

<p>Sammut said suburbs including New Farm and Teneriffe were considered before the group ultimately focused on Toowong due to its strong downsizer demographic and limited supply of developable riverfront land.</p>

<p>The site was acquired off-market after what Sammut described as a lengthy negotiation and planning process, with the developer pursuing an uplift to the original approval.</p>

<p>“We are DA approved now which is very exciting,” Sammut said.</p>

<p>“We've had our change approval come through and we've obviously doubled the height, 15 storeys plus rooftop. We've got 42 amazing apartments that are going to be coming to market soon.”</p>

<p><img alt="Sammut makes Brisbane apartment play" data-entity-type="" data-entity-uuid="" src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,dpr_2.0,q_auto:good/https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202025-12-23%20at%203.27.26%E2%80%AFPM.png?VersionId=ohkRkY0dIZlqdfME2EZePsCQavRiBadE" /></p>

<p>Bureau^proberts said the design responds to Toowong’s evolving urban character, balancing contemporary apartment living with the area’s established residential identity.</p>

<p>“A place where traditional Queensland living has taken place for centuries; Toowong is seeing a shift of contemporary influence, commercial and retail hubs mixed with well-considered residential offerings – all the while maintaining its character and charm,” the architect noted in planning documents submitted to Brisbane City Council.</p>

<p>The architecture practice said the project’s form was shaped by its riverfront setting, flood considerations, neighbouring building scales, and view corridors.</p>

<p>“They said the mix of four and two-bedroom apartments capture the ‘fundamental qualities of Queenslander living,’ translated into the context of a contemporary subtropical building.”</p>

<p>The development sits just off Coronation Drive within walking distance of Toowong’s retail precinct and the upgraded Regatta ferry terminal, while also benefiting from proximity to the incoming green bridge connection to West End. Sammut said the accessibility and amenity offering were central to the site’s appeal.</p>

<p>The approval adds to growing residential activity along the Toowong riverfront, joining nearby projects including Consolidated Properties’ Monarch Residences and Spyre Group’s ARC Residences.</p>


Sammut secures approval for debut Brisbane apartment development in Toowong

<p>Developer Lanevick is heading back into Sydney’s apartment market after focusing more heavily on the luxury townhouse and terrace sector in recent years.</p>

<p>Lanevick, founded and directed by Steve Maroun, is expecting to receive approval in the coming months for a new apartment development in Gladesville, with the aim to launch it to the market later this year.</p>

<p>The 51-apartment project, designed by Studio Johnston, will comprise a mix of one-, two-, and three-bedroom apartments positioned toward the Hunters Hill downsizer market.</p>

<p>“Traditionally it’s been difficult for people in that market to downsize because there just hasn’t been the right product available,” Maroun said.</p>

<p>“We’re targeting buyers who might have 30 to 40 per cent of their house value sitting in the bank after downsizing.</p>

<p>“They still want good spacious entertaining areas, they still want quality design, but they also want flexibility and the ability to enjoy life a bit more after working hard for a long time.”</p>

<p>The project sits near Boronia Park and within close proximity to the Parramatta River foreshore, an area Maroun says offers more of a Hunters Hill lifestyle than a traditional apartment precinct.</p>

<p>“From a lifestyle perspective, it’s really more Hunters Hill than Gladesville,” Maroun said. “You’re close to the foreshore, close to parklands, and still connected back into the village precinct.”</p>

<p>From level four and above, apartments will capture water views&nbsp;toward Sydney Harbour. Communal amenity will include rooftop entertaining areas, wellness spaces, and a gym tailored toward owner-occupier buyers.</p>

<p>“We’ve really designed these apartments around that buyer coming from the Hunters Hill LGA and what they’re actually looking for in their next chapter.”</p>

<p>The proposed development has also been designed to respond to the changing character of the broader Gladesville town centre, where a growing number of mixed-use and residential proposals are expected to emerge over the coming years.</p>

<p>“Gladesville presented a rare opportunity to deliver a genuinely design-led residential project within an evolving lifestyle precinct, just moments from the growing Gladesville town centre, and we’ve approached the project with a strong focus on architecture, liveability and long-term community value,” Maroun said.</p>

<p>Maroun said Lanevick saw a first-mover advantage within the precinct as planning controls continue to evolve to accommodate greater housing density.</p>

<p>“We think there’s a real opportunity there that hasn’t really been serviced properly yet,” he said.</p>

<p>“There’s going to be a broader evolution of the whole Gladesville village precinct over time, particularly with more activation and mixed-use outcomes.”</p>

<p>The Venus Street proposal will include a commercial and retail component at ground level designed to contribute to that evolving streetscape activation.</p>

<p>“A big part of the thinking was how do you activate that area properly and create more vibrancy and amenity, which is what Hunters Hill has been looking for,” Maroun said.</p>

<p>Lanevick’s focus since 2020 has largely been on smaller-scale luxury townhouse and terrace developments. The developer recently completed Royale Randwick, also designed by Studio Johnston, where prices reached $3.65 million. The project was featured in the UDIA NSW 2026 Professional Development Prospectus and was also named a finalist for Development of the Year.</p>

<p>&nbsp;</p>


Lanevick to cater for Hunters Hill downsizers with new Gladesville apartment development

<p>Property developer One Living, backed by former Macquarie banker turned investment manager Chris Green’s investment firm, has unveiled plans to bring more institutional capital into housing to help address the national supply crisis.</p>

<p>The New York-based investor has focused his firm, GreenPoint Partners, on addressing the supply shortage hitting middle market housing in Australia.</p>

<p>It is backing the new One Living business to develop more than 1000 units along the eastern seaboard. The new firm is starting with a development on Mona Vale Road, on the border of Mona Vale and Pymble, in Sydney’s Northern Beaches, with around 140 apartments planned. They are eyeing off more sites across the city.</p>

<p>With cost pressures rising in the industry, One Living’s model is to be a vertically integrated developer-builder, so it can respond directly to the housing gap by removing the cost inefficiencies embedded in traditional residential delivery.</p>

<p>“We are building a platform designed to operate at scale and starting in a market where there’s a clear need for quality, attainable housing,” One Living joint managing director Joseph Scuderi said.</p>

<p>“It’s that missing middle – it’s that attainable end of housing… that’s what most Australians invest into and what Australians can actually afford.”</p>

<p><img alt="Mona Vale" data-entity-type="file" data-entity-uuid="798dfa93-4941-4db6-a696-31e9dc18e81c" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%202.31.50%E2%80%AFPM.png?VersionId=mKBqi5C_DmeiXS.AtJkcR8LQIxqCqmFi" /></p>

<p>GreenPoint Partners brings years of experience assembling and scaling real estate operating businesses across major markets. And Green sees a big opportunity in Australia.</p>

<p>“For its size, sophistication and importance to the community, Australia’s living sector has remained largely under-institutionalised, which represents significant opportunity,” Green said. “GreenPoint identified that gap, assembled the right team, and is backing One Living to build a platform that is aligned to market needs.”</p>

<p>Green said being a builder-developer would give the company the capacity and flexibility it required to deliver reasonably-priced homes.</p>

<p>“We want it to be at that attainable level; not super high end luxury but at that attainable level,” he said.</p>

<p><img alt="Mona Vale" data-entity-type="file" data-entity-uuid="74a5344a-4b26-4d4a-ada3-056b1220be77" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%202.32.15%E2%80%AFPM.png?VersionId=vY8hXHO4reBMdO8ZXMWCNtGZJofUPQ3j" /></p>

<p>&nbsp;</p>

<p>One Living will undertake a component of affordable housing in its schemes, which it will own and operate, and it could also run build-to-rent on some sites.</p>

<p>Green praised local policy settings.</p>

<p>“The NSW government is being very supportive, strategic and pragmatic in terms of how do we generate more supply of housing,” he said. “We think it’s actually positive for development and the bit that’s been lacking at that attainable level is that it’s lots of relatively small private developers, whereas we want to create an institutional platform.”</p>

<p>One Living is also&nbsp;looking at high-density projects and could take on more institutional funding in the future.</p>

<p>“The way we will be able to achieve economies of scale is through size,” Green added.</p>


One Living enters Sydney's new apartment market with Northern Beaches site acquisition

<p>It's been several years since there's been an opportunity to buy a brand new townhome in Melbourne's coastal suburb of Mordialloc. Even apartment developments in recent times have been few and far between in the area.</p>

<p>Local developer LDS Property identified the gap in new housing, securing a site on White Street, directly opposite&nbsp;Woodlands Golf Club Mordialloc. They've recently launched&nbsp;<a href="https://www.apartments.com.au/new-townhouses/wm-residences-mordialloc-102-white-street-mordialloc-vic-3195">WM Residences</a>, just 13 townhouses which they have already started building.</p>

<p>Projects by Buxton Director Heath Thompson, who is selling WM Residences, says the townhouses x that perfect middle ground be</p>

<p data-end="683" data-start="511">"Mordialloc residents have had limited options to downsize within the suburb, often forcing them to look elsewhere despite long-standing ties to the area," Thompson says.</p>

<p data-end="882" data-start="690">"With very little comparable new supply coming to market, projects like WM Residences are well placed, particularly as buyers look to capitalise on current conditions amid constrained supply."</p>

<p data-end="882" data-start="690">[smartcode_project:default project_id=134646 project_image_fid=6109]</p>

<p>The development, designed by regarded architecture firm&nbsp;<a href="https://www.apartments.com.au/architects/ewert-leaf">Ewert Leaf</a>,&nbsp;adopts a deliberately restrained architectural approach, focusing on simplicity, durability and liveability rather than overt design gestures.</p>

<p>The boutique scale is central to the offering. With only 13 three-bedroom residences, each home is configured to prioritise functional layouts and everyday use, supported by private terraces and secure two-car garages.</p>

<p>Ewert Leaf’s design response leans into a calm, neutral material palette. Interiors are defined by oak flooring, white walls and soft finishes, creating a consistent and understated backdrop. The approach avoids trend-driven detailing in favour of longevity, with an emphasis on natural light and spatial clarity.</p>

<p>[smartcode_project:default project_id=134646 project_image_fid=6110]</p>

<p>Beyond aesthetics, the homes are designed to meet contemporary performance expectations. Each residence targets a minimum 6-star energy rating, incorporating double glazing, comprehensive insulation and all-electric Bosch appliances.</p>

<p>The project’s location supports a walkable coastal lifestyle, sitting within close proximity to Mordialloc’s foreshore, Main Street retail strip and the train station. Local cafés and dining venues, including Suburbia Deli and Hendriks Café, are within a short walk, reinforcing the area’s established neighbourhood character.</p>

<p>[smartcode_project:default project_id=134646 project_image_fid=6116]</p>

<p data-end="247" data-is-last-node="" data-is-only-node="" data-start="0">While <a href="https://www.apartments.com.au/developments/mordialloc-vic-3195">Mordialloc</a> is often defined by its beach and pier, the project taps into other areas of day to day living, offering easy access to local food, casual dining and transport, rather than positioning itself purely as a lifestyle retreat.</p>

<p>WM Residences reflects a continued trend across Melbourne’s coastal suburbs towards smaller-scale, design-led townhouse developments, particularly on infill sites where proximity to amenity is already established.</p>

<p>With construction commenced prior to its market entry, the project aligns with a growing preference among buyers for developments with visible progress and defined delivery timeframes.</p>

<p>[smartcode_project_cta:default project_id=134646]</p>


WM Residences fills gap in Mordialloc townhouse market

Property News

There are five reasons to expect a further slowing in the national average home price growth next year, which will follow by a peak in prices sometime in the second half of 2022, and then falling prices in 2023, according to Dr Shane Oliver, Head of Investment Strategy and Chief Economist at AMP Capital.

"We remain of the view that we may be getting closer to the end of the 25-year bull market in property prices," he said.

He suggests firstly worsening affordability is constraining more buyers. Affordability has long been an issue in the Australian property market, he noted.

"While interest rates are still low the surge in house prices relative to wages has gone hand in hand with a surge in the level of debt relative to incomes. 

"That now means that it takes 8 years to save for a deposit in Sydney and 7 years in Melbourne.

"This is now squeezing out first home buyers yet again (which has seen their share of new housing finance fall from 25% to 18% since December) and increasingly existing owners looking to trade up are being squeezed out as well. 

"This is particularly an issue in Sydney and Melbourne and partly explains their slowing relative to other cities.

Secondly Oliver noted the supply/ demand balance is starting to improve. 

"Supply is on the rise again reflecting pent up selling, the end of lockdowns and high prices. 

"This could start to reverse the chronically low level of listings seen over the last 18 months. 

"More fundamentally strong levels of home building over the last two years following the unit building boom since 2015, combined with the absence of immigrants - which has resulted in a slump in underlying housing demand - have started to see the underlying supply/demand balance come under control," he noted. 

Thirdly Oliver noted rising interest rates will reduce the amount new borrowers can borrow and hence pay for dwellings. 

"Fixed mortgage rates are already on the rise (with several banks increasing them by 0.5% or more) and the RBA is expected to start raising the cash rate (and hence variable mortgage rates) from late next year. Rising interest rates are likely to be a big dampener. 

"The collapse in fixed rates to 2% or less played a big role in the recent boom. 

"Fixed mortgages have accounted for 50% or so of new loans recently, so are far more significant than they used to be in impacting new buyer demand (even though there is no impact on existing fixed borrowers until they roll off current terms which may become an issue next year)," he noted.

Fourthly Oliver noted macro prudential tightening is reducing the amount new borrowers can borrow and pay for homes. 

"So far APRA has told banks to increase the interest rate serviceability buffer they apply to borrowing rates in assessing borrowers from 2.5% to 3% and are now moving to require banks to hold more capital for higher risk loans. 

"The former will reduce the amount borrowers can borrow and the latter will raise the interest rate on or reduce the supply of higher risk loans. 

"Further tightening measures are possible."

Finally Oliver noted a rotation in consumer spending back towards services as reopening occurs (covid and the Omicron variant permitting) may reduce housing demand.

He noted there had been a "sharp loss of momentum since March" as a result of worsening affordability, rising supply, rising rates, macro prudential tightening and some eventual rotation in spending away from housing. 

"We expect a further slowing in home price gains to 5% in 2022, with prices likely to start falling from around September/October next year resulting in a 5 to 10% decline in prices in 2023," he said.



Oliver said the anticipated gradual recovery in immigration may take pressure off capital city prices.

jchancellor-FAypfDUnLy

Five reasons to expect a cooling in the property market: Shane Oliver

<html><body>
<p class="Body">Friday last week encapsulated all that’s wrong in the reporting of real estate in Australia. “Rental prices continue to soar” screamed one headline, while “Rental prices in Australia are going backwards” shouted another.<span style="line-height: 1.3em;"> </span></p>
<p class="Body">How did different media outlets come to such different conclusions? One published the press release on The Domain Rental Report and the other published the handout from the CoreLogic Rental Index.<span style="line-height: 1.3em;"> </span></p>
<p class="Body">As is so often the case, the statistics from one research source are different from those on the same subject from a competing source. Newspapers and other forms of media report each in isolation, often running the press release pretty much verbatim, without applying any journalistic oversight.<span style="line-height: 1.3em;"> </span></p>
<p class="Body">No one looks at the material on the one subject from all sources and analyses it to make some sense of it for readers.<span style="line-height: 1.3em;"> </span></p>
<p class="Body">Sometimes the numbers from two different sources aren’t that different. It’s just that one research entity will choose to place a negative slant on the figures and media will go with that, while another researcher will emphasise the positive.</p>
<p class="Body">The lack of genuine journalism on these matters is quite alarming. The content and tone of the press release is re-cycled to the public as news.</p>
<p class="Body">The result is confusion and misinformation, the curse of real estate consumers trying to figure out what’s really going on and make good decisions on investment.</p>
<p class="Body">So what can we make of the national rental data published by two major sources on the same day recently?</p>
<p class="Body">The reality is that they’re not actually so different. One chose to take a negative stance and the other decided to paint a brighter picture.</p>
<p class="Body">Here’s where Domain agrees with CoreLogic:</p>
<ul>
<li>Both see rents going seriously backwards in Darwin. The annual decline in rents is in double digits, according to both sources.</li>
<li>Rents in Perth are still falling, though not as much as in Darwin, according to both.</li>
<li>Both sources see only moderate growth in rents in Sydney.</li>
<li>Both sources see minor growth in Melbourne, around 2-3 percent in annual terms.</li>
</ul>
<p class="Body">And here’s where they don’t agree.</p>
<ul>
<li>Domain records 2-3 percent growth in Brisbane, but CoreLogic reports a marginal fall.</li>
<li>Domain sees minor growth in Adelaide, but CoreLogic has rents down 1 percent annually.</li>
<li>CoreLogic reports essentially no change in Hobart, but Domain reports a 6 percent annual rise in house rents and a 2 percent rise in apartment rents.</li>
<li>CoreLogic records a 1.2 percent rise in its Canberra Rental Index but Domain sees bigger increases in rents in the capital.</li>
</ul>
<p class="Body">It basically comes down to this: while there are a number of similarities, Domain’s figures overall are more positive than CoreLogic’s and it chose to take an optimistic outlet.</p>
<p class="Body">“Rents in most capital cities continue to rise, with falling vacancy rates indicating an ongoing shortage of rental properties,” said Domain chief economist Andrew Wilson.</p>
<p class="Body">“Despite the recent influx of home building, we can expect to see upward pressure on both houses and unit rents in most capital cities continuing in the foreseeable future.”<span style="line-height: 1.3em;"> </span></p>
<p class="Body">But the CoreLogic analysis said the “annual capital city rental change is in decline and is now the lowest since 1996”.</p>
<p class="Body">My take on all this, having observed the quarterly rental data coming from all the usual suspects over the past 2-3 years, is that capital city rental growth has been consistently low over that period. While there are occasional exceptions, the capital cities have failed to deliver strong growth in rentals for years – and, in the case of Perth and Darwin, rents have dropped substantially.</p>
<p class="Body">Domain has chosen to be upbeat on its latest figures, but really they show very little in the way of strong, meaningful growth in rents.</p>
<p class="Body">It provides further evidence that the “housing shortage crisis” consistently claimed by the developer lobby is another of real estate’s enduring myths.</p>
<p class="Body"><em>Terry Ryder is the founder of <a href="https://www.hotspotting.com.au/" target="_blank">hotspotting.com.au</a>. You can <a href="https://mailto:ryder@hotspotting.com.au" target="_blank">email him</a> or follow him on <a href="https://twitter.com/hotspotting" target="_blank">Twitter.</a></em></p>
</body></html>

terryryder-YECXbqmri2

Housing shortage crisis an enduring myth: Terry Ryder

<html><body>
<div>The wealth effect from a multi-year Sydney property market boom has sent trend retail turnover, new motor vehicle sales, building activity and total employment in the Premier State surging to new highs in recent months. </div>
<div> </div>
<div>It's not hard to see why.<br><br>Over the three years to June 2015 the value of residential dwelling stock in the state has flamed up by nearly three quarters of a trillion dollars - massively boosting net household wealth in the process - and in turn leading to increased employment in the residential construction sector together with its associated multiplier effect.<br><br>The latest data from the ABS showed that the total value of residential dwelling stock in New South Wales has exploded by +$737 billion to nearly $2.3 trillion over the three years since March 2012.<br><br>However, increases in the value of dwelling stock have been by no means uniform across Australia as you can see in the first chart below.</div>
<div> </div>
<div><a href="/images/2015/09/23/A1.jpg" target="_blank">Click to enlarge</a></div>
<div> </div>
<div><img src="/images/2015/09/23/A1.jpg" alt=""></div>
<div> </div>
<div><span>Indeed, while Victoria (+$327 billion) and Queensland (+$123 billion) have recorded some solid gains over the last three years - which have contributed to the combined value of Australia's dwelling stock surpassing $5.75 trillion - the total value of stock has been declining in Western Australia and the Northern Territory for the past year.</span></div>
<div><span> </span></div>
<div><a href="/images/2015/09/23/A2.jpg" target="_blank"><span>Click to enlarge</span></a></div>
<div><span> </span></div>
<div><span><img src="/images/2015/09/23/A2.jpg" alt=""></span></div>
<div> </div>
<div> </div>
<div>
<div>Over the June 2015 quarter New South Wales (+$193 billion) and Victoria (+$65 billion) accounted for 95 per cent of the +$272 billion uplift in the total value of Australia's residential dwelling stock.<br><br>Note that although the ABS data series is not the most timely indicator, with the benefit of additional time to collate results it is likely to be the most accurate.</div>
<br><strong><span style="text-decoration: underline;">Residential indexes</span></strong><br><br><div>The latest figures released today by the ABS to Q2 2015 recorded an extraordinary boom in Sydney dwelling prices with prices exploding +8.9 per cent higher in the June quarter to be +18.9 per cent higher over the year.<br><br>Sydney has not seen quarterly gains of this magnitude for nearly three decades in percentage terms.</div>
<div>
<br>Solid gains for the quarter were also recorded in Melbourne (+4.2 per cent), Brisbane (+0.9 per cent) and Canberra (+0.8 per cent).</div>
<div>
<br>Elsewhere index moves for the quarter were subdued, or negative in the cases of Perth (-0.9 per cent) and Darwin (-0.8 per cent).</div>
<div> </div>
<div><a href="/images/2015/09/23/B1.jpg" target="_blank">Click to enlarge</a></div>
<div> </div>
<div><img src="/images/2015/09/23/B1.jpg" alt=""></div>
<div> </div>
<div>
<span>Since Q4 2008 Sydney's accelerating dwelling prices have blown up the index to be +77.3 per cent higher, with Melbourne a distant second at +46.8 per cent.</span><br><br><span>At the bottom end of the scale come the southern state capitals of Hobart (+12.6 per cent) and Adelaide (+15.9 per cent). </span>
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<div><a href="/images/2015/09/23/A5.jpg" target="_blank"><span>Click to enlarge</span></a></div>
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<div><span><img src="/images/2015/09/23/A5.jpg" alt=""></span></div>
<div> </div>
<div> </div>
<div><span>The mean price of a residential dwelling as at June 2015 increased to $604,700 in Australia having jumped by some $26,200 in the quarter, with those gains having been overwhelmingly driven by Sydney (+$63,400 to $777,400) and Melbourne (+$24,300 to $605,000).</span></div>
<div><span> </span></div>
<div><a href="/images/2015/09/23/A4.jpg" target="_blank"><span>Click to enlarge</span></a></div>
<div><span><img src="/images/2015/09/23/A4.jpg" alt=""></span></div>
<div> </div>
<div> </div>
<div>
<strong><span style="text-decoration: underline;">Established houses outperform</span></strong><br><div class="separator"> </div>
<div class="separator">ABS data now exists back to September 2003 which allows us to compare the relative performance of established houses versus attached dwellings.</div>
<div class="separator"> </div>
<div class="separator">As you can see below, on average established houses (+89 per cent since Q3 2003) have outperformed attached dwellings (+73 per cent) over the past dozen years. </div>
<div class="separator"> </div>
<div class="separator">These figures equate to compounding annual price growth of +5.4 per cent for established houses and +4.6 per cent for attached dwellings since Q3 2003.</div>
<div class="separator"> </div>
<div class="separator"><a href="/images/2015/09/23/A7.jpg" target="_blank">Click to enlarge</a></div>
<div class="separator"> </div>
<div class="separator"><img src="/images/2015/09/23/A7.jpg" alt=""></div>
<div class="separator"> </div>
<div class="separator">
<div>Of course, averages mask any number of sub-trends, and it is also true that initial rental yields on townhouses, units and apartments can often be at least 1 per cent higher than those achievable from established houses in equivalent locations.<br><br>It may also be the case that going forward attached dwellings might perform comparatively well in the denser capital cities where the affordability of established housing is becoming increasingly prohibitive.</div>
<div> </div>
<div>Nevertheless, the above chart does hint towards land value and scarcity value as being two of the key underlying drivers of dwelling price growth.</div>
<br><strong><span style="text-decoration: underline;">Supply response</span></strong><br><br><div>The preliminary figures for Q2 2015 recorded an estimated 9,528,300 dwellings in Australia, a reasonably solid increase of +38,400 dwellings for the June quarter and +161,500 for the past year.</div>
<div> </div>
<div>Unfortunately the ABS could provide no preliminary estimate for the number of New South Wales dwellings this quarter.</div>
<div> </div>
<div>Using projections of historic data it seems likely that assuming the data is accurate the total stock of dwellings in the Premier State has increa<span>sed by close to <span>~</span>120,000 units since September 2011, with the population of the state having increased by a<span>n estimated <span>~</span>375,000 over the same time horizon. </span></span>
</div>
<div> </div>
<div>In other words, despite an uplift in both home starts and dwelling completions since FY2012, New South Wales evidently has some way to go before the market becomes saturated with new builds.</div>
<div> </div>
<div><a href="/images/2015/09/23/A3.jpg" target="_blank">Click to enlarge</a></div>
<div><img src="/images/2015/09/23/A3.jpg" alt=""></div>
<div> </div>
<div>
<div>It was announced this week that the New South Wales Government will release some 7,700 hectares of land for the construction of up to 35.000 new homes to the south of Campbelltown.</div>
<div> </div>
<div>It is dubious, however, just how much impact newly constructed dwellings located 70 kilometres from the centre of Sydney will have on established dwellings in the inner suburban market given the poor level of substitutability with fringe housing. </div>
<div> </div>
<div>
<p><span><em>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>.</em><br></span></p>
<p><em>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>.</em></p>
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NSW dwelling stock value explodes: Pete Wargent

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<p>We can educate “ignorance” but “stupidity” is another ball game.</p>
<p>Allow me to share with you two scenarios. I will in turn give you the opportunity to ponder which of these is made through ignorance and which one is made through stupidity personified. Like always, pour a cup of coffee and read on.</p>
<p><strong>First scenario: </strong></p>
<p>I attended to a home in the Northern Beaches to provide a Comparative Market Analysis (CMA) and bid for the vendor’s custom. Like always, local agents were also called in.</p>
<p>After discussing the process and the method of sale with the vendors, they began to enlighten me about my competition. Names withheld to protect the dummies. </p>
<p>The following is a short transcript of the discussion. </p>
<p>Agent (A): What has the out-of-area agent (Me) told you the home is worth? </p>
<p>Vendor (V): After recommendations made; fixing and cleaning parts of the home, he felt $1,500,00-$1,600,000 is achievable and would advertise along these lines. </p>
<p>V: What do you believe the home is worth?</p>
<p>A: The figures sound right. But we would not advertise it like he suggests.</p>
<p>V: What do you suggest? </p>
<p>A: We would auction the home and ask for offers above $1,350,000.</p>
<p>V: But you told me the house was worth between, $1,500,000-$1,600,000. </p>
<p>A: Yes that’s right, but we don’t want to scare any buyers/enquiry and we can work them up at the auction. </p>
<p><strong>Second scenario: </strong></p>
<p>We have on the market a home for sale, in Eastlakes. As usual, other than normal enquiry, we also receive enquiry from agents that are curious. Agents that work in the area, their patch. </p>
<p>The conversation went along these lines.</p>
<p>Local Agent (LA): Hi, I noticed you have a property in the area, I was told you had sold it? If so, what did it sell for? </p>
<p>Me: Not sold as yet, but presently working with two offers. How can I help you?</p>
<p>LA: Well, I’m a local agent and I have listed a home around the corner, just wanted to see what you sold your home for? </p>
<p>M: Nice, how does it compare with my one?</p>
<p>LA: Very similar but land a bit smaller. Also fully renovated and 4 bedrooms, single level. </p>
<p>Me: If I can ask, what’s your price guide? </p>
<p>LA: We are quoting $1,500,000-$1,800,000.</p>
<p>Me: Wow, that’s a very broad price-guide isn’t it?</p>
<p>LA: Well it’s hard to determine the value of property.</p>
<p>Now, you tell me which one of these agents is ignorant and which one is simply stupid. Or do you think both fall in the same category? Or perhaps the words arrogant and deceptive spring to mind? </p>
<p>One thing is for sure; not all vendors are sympathetic to “under-quoting” and deceitful marketing strategies. Nonetheless, is it up to the vendor to guide the real estate industry into best practice, or up to the professional? </p>
<p>What I can say to most of my realtor friends is; if the kitchen is too hot, then go back to selling used cars and take the nonsense of charging vendors for the sale and marketing fees with you.</p>
<p> </p>
<p><em><span>EDWIN ALMEIDA</span> is licensee in charge of <a href="https://www.just-think.com.au/" target="_blank">Just Think Real Estate</a>.<a href="https://www.just-thin.com.au/"><br></a></em></p>
<p><em>He is also the creator of <a href="https://www.youtube.com/user/JustThinkProperty" target="_blank">Oz Real Estate.TV</a> and a presenter for <a href="https://propertyinvestingvault.com/" target="_blank">propertyinvestingvault.com</a>.</em></p>
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Ignorance or stupidity? Edwin Almeida

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<p>We would all love a dollar every time the words “tax reform” have been mentioned over the past decade with countless inquiries and white papers presented where no reform ever eventuated.</p>
<p>So it was most interesting to see Prime Minister Malcolm Turnbull and freshly appointed Treasurer Scott Morrison flagging tax reform, income tax cuts and housing affordability again, much like that broken record of their many predecessors.</p>
<p>Yes the Australian economy has its fair share of problems much like the rest of the developed countries across the planet where the common problem is that they are their own worst enemies. The last major tax reform in Australia was the introduction of the GST back in 2000 where 15 years on the taxes and duties that were promised to be removed still remain in place. So it should come as no surprise that the NSW Premier Mike Baird is leading the debate on the GST being increased to 15 per cent.</p>
<p>Back in February 2015 I wrote about abolishing payroll tax to kick start the economy, so high on Malcolm Turnbull’s to – do list should be the abolition of payroll tax on the basis that each business then injects into their business over the next financial year the amount previously paid in payroll tax.</p>
<p>At last month’s Australian Financial Review Tax Reform Summit Malcolm Turnbull effectively put superannuation tax, negative gearing and capital gains tax concessions back on the discussion table. Respected economist Saul Eslake referred to Australia’s tax system as being a “giant Swiss cheese” riddled with holes that allow the wealthy to pay less tax through minimisation strategies. Based on those observations we can expect an intense debate in coming months where previous governments chose to side – step these issues as they were too contentious. We also need to bear in mind that we are approximately twelve months out from a federal election – so how will such a debate go down with voters?</p>
<p>Current Australian Bureau of Statistics projections have the Australian population growing at approximately 4 million people per decade, which places Australia with the fastest rate of population growth in the developed world. Sydney and Melbourne can expect an additional 100,000 new arrivals annually for the next 40 years which in itself requires massive planning although this may further explain the recent Federal portfolio announcement creating the Cities and Built Environment portfolio.</p>
<p>So now Australia’s tax reform discussion has begun in earnest although given the sheer magnitude that explains why this debate has been deferred for decades. Prior to the next Federal Election we can expect to be inundated with discussion groups and scare campaigns although nothing will really happen (if we do get tax reform) until the 2019 Federal Election given such reforms take years to plan then execute.</p>
<p>In the meantime if we are looking for clues we should note with interest that Scott Morrison has just appointed Phil Gaetjens as his chief of staff which should not be too much of a challenge as he was Peter Costello’s chief of staff from 1997 to 2007. Yes one of the key architects for the GST introduction 15 years ago so it really doesn’t require much joining of the dots to see what picture will appear on the canvas.</p>
<p>Although this time around if there is to be any reform the Australian voters will demand that the states and territories commit to honoring their word when it comes to removing taxes and duties in lieu of increasing the GST to 15 per cent. Somehow many are of the opinion that the states and territories will never agree to take payroll tax and stamp duties from their respective cash registers.</p>
<p>‘<br>The tax reform debate really needs to start at Commonwealth Heads of Government Meeting and wouldn’t you love to be a fly on the wall when the Prime Minister and Treasurer outline their bold tax reform agendas.</p>
<p>In NSW we are witnessing the amalgamation of councils because the state government is not happy with them, believing amalgamation will lead to more developments (land tax and stamp duties) – which it certainly will. So with Australia’s biggest ever tax reform finally now plated up on the table they might as well look at the three – tier – governments too.</p>
<p>Make that two as the council amalgamations have already been decided – just not announced.</p>
<h5>MOSMAN – 2088</h5>
<p>• Number of houses on the market this time last year – 61</p>
<p>• Number of houses on the market last week – 51</p>
<p>• Number of houses on the market this week – 48</p>
<p>• Number of apartments on the market this time last year – 41</p>
<p>• Number of apartments on the market last week – 52</p>
<p>• Number of apartments on the market this week – 60</p>
<h5>CREMORNE – 2090</h5>
<p>• Number of houses on the market this time last year – 8</p>
<p>• Number of houses on the market last week – 5</p>
<p>• Number of houses on the market this week – 7</p>
<p>• Number of apartments on the market this time last year – 19</p>
<p>• Number of apartments on the market last week – 21</p>
<p>• Number of apartments on the market this week – 23</p>
<h5>NEUTRAL BAY – 2089</h5>
<p>• Number of houses on the market this time last year – 5</p>
<p>• Number of houses on the market last week – 7</p>
<p>•Number of houses on the market this week – 9</p>
<p>• Number of apartments on the market this time last year– 43</p>
<p>• Number of apartments on the market last week – 28</p>
<p>• Number of apartments on the market this week – 21</p>
<p><em><span>ROBERT SIMEON</span> is a director of </em><em><a href="https://www.rwm.com.au/" target="_blank" title="RWM" rel="nofollow">Richardson Wrench Mosman and Neutral Bay</a> </em><em>and has been selling residential real estate in Sydney since 1985. <br>He has also been writing real estate blog </em><em><a href="https://www.rwm.com.au/news/" target="_blank" title="Virtual Realty News" rel="nofollow">Virtual Realty News</a> </em><em>since 2000. </em></p>
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Times change, sadly politicians haven’t: Robert Simeon

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<div>It's set to be a monester week of data releases ahead, from tomorrow in particular, but before that a quick look at the weekend auction results.</div>
<div> </div>
<div>
<em>Core-Logic-RP Data</em> reported its preliminary auction stats which showed stronger initial results than one year ago in Melbourne, Brisbane, and Perth.</div>
<div> </div>
<div>Sydney recorded another vigorous result of 78.1 per cent, which was stronger than the final result for last week of 76.2 per cent, but for the first time this year was below the preliminary clearance rate from one year ago at 79.9 per cent.</div>
<div> </div>
<div><a href="/images/2015/08/31/RPD1.jpg" target="_blank">Click to enlarge</a></div>
<div><img src="/images/2015/08/31/RPD1.jpg" alt=""></div>
<div> </div>
<div>
<div>Sydney's incredible run which has seen house prices rising at a pace of well over <a href="https://petewargent.blogspot.com.au/2015/08/residex-astonishing-sydney-boom" target="_blank">20 per cent per annum</a> has continued right the way through until the final week before the spring selling season.</div>
<br><div>The result of 78.1 per cent this week will doubtlesss lead to some premature extrapolation, but there are a few reasons why the Sydney market probably has a bit of a way to run yet before it runs out of puff.</div>
<div> </div>
<div>Firstly while auction volumes have been tracking at the highest level we have seen, total listings are still moderate, and less than those of Melbourne and even Perth.</div>
<div> </div>
<div>Secondly, in the inner- and middle-ring suburbs that matter, clearance rates are still tracking at exceptionally high levels.</div>
<div><span> </span></div>
<div><span><span>According to <em>CoreLogic-RP Data</em> the Eastern Suburbs (87.6 per cent), North Sydney &amp; Hornsby (86.3 per cent) and the Inner West (85.1 per cent) had the strongest clearance rates, followed by Blacktown (84.6 per cent), City &amp; Inner South (82.8 per cent) and the Northern Beaches (81.5 per cent).</span></span></div>
<div><span><span> </span></span></div>
<div><span><span>Although these are only preliminary results, traditionally it is said that results above 80 per cent point towards a "boom time" property market.</span></span></div>
<div><span><span> </span></span></div>
<div><span><span>And thirdly, John McGrath ignited some debate earlier this year when he claimed that Sydney's inner suburbs will be "hot forever".</span></span></div>
<div><span><span> </span></span></div>
<div><span><span>While this obviously isn't set in stone, simple geometry tells you that within the inner 6km there are only 113 square kilometres of land for which there is huge demand. </span></span></div>
<div><span><span> </span></span></div>
<div><span><span>Nothing is certain, of course, but personally I wouldn't bet against it. </span></span></div>
<div><span><span> </span></span></div>
<div><span><span>It's precisely what has happened in prime central London over the last couple of decades. </span></span></div>
<div><span><span> </span></span></div>
<div>
<p><span><em>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>.</em><br></span></p>
<p><em>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>.</em></p>
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Inner suburbs hot for-evuh: Pete Wargent

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<p>Listings rose 3 percent in June, driven mainly by a 7 percent jump in Brisbane.</p>
<p>Higher listings in the month mirror recent softening auction trends, reported SQM Research. </p>
<p>Over the year, listings are still 3.3 percent lower, with Melbourne (-12.7 percent) and Hobart (-14,8 percent) recording excessive declines. </p>
<p><a href="https://www.propertyobserver.com.au/images/2017/07/05/SQM1.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/07/05/SQM1.jpg" alt=""></p>
<p>Melbourne house prices have exploded </p>
<p>The Hobart market is very tight, with a total of only 2912 listings, sending rents and house prices higher. </p>
<p>With the other exception of Melbourne, listings are generally higher this year than last.</p>
<p>Listings in Brisbane jumped by 7 percent in June, as vendors struggle gamely to offload a glut of apartment stock.  </p>
<p><a href="https://www.propertyobserver.com.au/images/2017/07/05/SQM2.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/07/05/SQM2.jpg" alt=""></p>
<p>Meanwhile SQM reported that median asking prices in Melbourne have exploded, rising by 22 percent over the year to June. </p>
<p>Indeed, Melbourne asking prices for houses have increased by a massive 48 percent over the past three years, now comfortably outstripping growth in all other capital cities, including house prices in Sydney at 39 percent. </p>
<p> </p>
<p class="p1"><span class="s1">PETE WARGENT is the co-founder of <a href="https://allenwargent.com/" target="_blank"><span class="s2">AllenWargent</span></a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank"><span class="s2">blogger</span></a>.</span></p>
<p class="p2"><span class="s3"><em>His latest book is </em><a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank"><span class="s2"><em>Four Green Houses and a Red Hotel</em></span></a><em>.</em></span></p>
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Hobart property market tight

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<p>Another fascinating week with Australia experiencing a significant stock market correction followed by the National Reform Summit which in all probability won’t amount to anything given the responsibility rests with our politicians. When it comes to anything economic in Australia we see a typical allergy where they are too frightened to come into contact with these issues.</p>
<p>Since 2013, the internet population grew approximately 20% – from 2.4 billion to 3.2 billion people yet for some strange reason we still struggle to understand data, or is it that the data we should be seeing is withheld? Australia’s misunderstood property markets are a prime example – with Sydney well ahead of the country in terms of inaccuracy in reporting.</p>
<p>One of the main areas for concern to come from the National Reform Summit was productivity where many believe Australia has come to a grinding halt which is replicated with our present GDP growth rates. For some time now I have been carefully watching property growth rates which (wait for it) closely resemble our GDP results.</p>
<p>To further explain we closely looked at sales data from 2009 to 2014 for house and apartment sales in Seaforth, Mosman, Cremorne, Neutral Bay, Cammeray and Northbridge where the total number of households equates to 39,227.<em>Source CoreLogic RP Data.</em></p>
<p>We need to bear in mind that when you closely examine individual suburb markets at five (5) per cent turnover per annum the market turnover is normal and slightly under-performing. When it gets to ten (10) % per annum turnover the market is considered strong and when the market hits fifteen (15) % turnover per annum that is a boom. The last time we witnessed the market hitting 15% was in 1988.</p>
<p>So we took the six year averages for sales and this is what we found.</p>
<ul>
<li>Seaforth – Average number of sales from 2009 to 2014 per annum – 120 houses which equates to 5.1% of the total market on a per annum basis.</li>
<li>Seaforth – Average number of sales from 2009 to 2014 per annum – 16 apartments which equates to 4.7% of the total market on a per annum basis.</li>
<li>Mosman – Average number of sales from 2009 to 2014 per annum – 312 houses which equates to 5.3% of the total market on a per annum basis.</li>
<li>Mosman – Average number of sales from 2009 to 2014 per annum – 492 apartments which equates to 4.9% of the total market on a per annum basis.</li>
<li>Cremorne – Average number of sales from 2009 to 2014 per annum – 62 houses which equates to 4.6% of the total market on a per annum basis.</li>
<li>Cremorne – Average number of sales from 2009 to 2014 per annum – 278 apartments which equates to 5.0% of the total market on a per annum basis.</li>
<li>Neutral Bay – Average number of sales from 2009 to 2014 per annum – 55 houses which equates to 4.95% of the total market on a per annum basis.</li>
<li>Neutral Bay – Average number of sales from 2009 to 2014 per annum – 323 apartments which equates to 4.8% of the total market on a per annum basis.</li>
<li>Cammeray – Average number of sales from 2009 to 2014 per annum – 56 houses which equates to 5.6% of the total market on a per annum basis.</li>
<li>Cammeray – Average number of sales from 2009 to 2014 per annum – 147 apartments which equates to 5.5% of the total market on a per annum basis.</li>
<li>Northbridge – Average number of sales from 2009 to 2014 per annum – 88 houses which equates to 4.3% of the total market on a per annum basis.</li>
<li>Northbridge – Average number of sales from 2009 to 2014 per annum – 28 apartments which equates to 5.5% of the total market on a per annum basis.</li>
</ul>
<p>When one takes into account that the cash rate at the beginning of 2009 was 3.25% and dropping to 2.50 at the end of 2014 we would have expected the number of properties to be rapidly increasing – which has not been the case. Moreover this reaffirms that business is not doing that well given households are not that interested in taking on more debt, which certainly resonated with a lot that was presented at the National Reform Summit.<br>.<br>The burning question is what is Canberra going to do about this?</p>
<h5>Mosman Houses Sold – Total Number 5,890 Houses</h5>
<p>2009 – 303<br>2010 – 325<br>2011 – 264<br>2012 – 276<br>2013 – 355<br>2014 – 350</p>
<h5>Mosman Apartments Sold – Total Number 10,020 Apartments</h5>
<p>2009 – 523<br>2010 – 453<br>2011 – 474<br>2012 – 443<br>2013 – 543<br>2014 – 514</p>
<h5>Cremorne Houses Sold – Total Number 1,135 Houses</h5>
<p>2009 – 71<br>2010 – 65<br>2011 – 56<br>2012 – 56<br>2013 – 66<br>2014 – 59</p>
<h5>Cremorne Apartments Sold – Total Number 5,481 Apartments</h5>
<p>2009 – 339<br>2010 – 302<br>2011 – 288<br>2012 – 218<br>2013 – 267<br>2014 – 255</p>
<h5>Neutral Bay Houses Sold – Total Number 1,109 Houses</h5>
<p>2009 – 61<br>2010 – 69<br>2011 – 51<br>2012 – 51<br>2013 – 61<br>2014 – 40</p>
<h5>Neutral Bay Apartments Sold – Total Number 6,638 Apartments</h5>
<p>2009 – 411<br>2010 – 362<br>2011 – 287<br>2012 – 283<br>2013 – 308<br>2014 – 286</p>
<h5>Cammeray Houses Sold – Total Number 1,275 Houses</h5>
<p>2009 – 58<br>2010 – 50<br>2011 – 50<br>2012 – 56<br>2013 – 64<br>2014 – 61</p>
<h5>Cammeray Apartments Sold – Total Number 2,610 Apartments</h5>
<p>2009 – 156<br>2010 – 194<br>2011 – 156<br>2012 – 107<br>2013 – 135<br>2014 – 137</p>
<h5>Northbridge Houses Sold – Total Number 1,914 Houses</h5>
<p>2009 – 88<br>2010 – 63<br>2011 – 68<br>2012 – 89<br>2013 – 102<br>2014 – 94</p>
<h5>Northbridge Apartments Sold – Total Number 504 Apartments</h5>
<p>2009 – 32<br>2010 – 33<br>2011 – 20<br>2012 – 23<br>2013 – 35<br>2014 – 27</p>
<h5>Seaforth Houses Sold – Total Number 2,317 Houses</h5>
<p>2009 – 113<br>2010 – 109<br>2011 – 113<br>2012 – 121<br>2013 – 138<br>2014 – 127</p>
<h5>Seaforth Apartments Sold – Total Number 334 Apartments</h5>
<p>2009 – 21<br>2010 – 11<br>2011 – 10<br>2012 – 14<br>2013 – 17<br>2014 – 26<br><em>Source – CoreLogic RP Data</em></p>
<h5>MOSMAN – 2088</h5>
<p>• Number of houses on the market this time last year – 69</p>
<p>• Number of houses on the market last week – 53</p>
<p>• Number of houses on the market this week – 65</p>
<p>• Number of apartments on the market this time last year – 51</p>
<p>• Number of apartments on the market last week – 41</p>
<p>• Number of apartments on the market this week – 42</p>
<h5>CREMORNE – 2090</h5>
<p>• Number of houses on the market this time last year – 7</p>
<p>• Number of houses on the market last week – 2</p>
<p>• Number of houses on the market this week – 4</p>
<p>• Number of apartments on the market this time last year – 15</p>
<p>• Number of apartments on the market last week – 15</p>
<p>• Number of apartments on the market this week – 18</p>
<h5>NEUTRAL BAY – 2089</h5>
<p>• Number of houses on the market this time last year – 5</p>
<p>• Number of houses on the market last week – 4</p>
<p>•Number of houses on the market this week – 2</p>
<p>• Number of apartments on the market this time last year– 36</p>
<p>• Number of apartments on the market last week – 25</p>
<p>• Number of apartments on the market this week – 30</p>
<p> <em><span>ROBERT SIMEON</span> is a director of </em><em><a href="https://www.rwm.com.au/" target="_blank" title="RWM" rel="nofollow">Richardson Wrench Mosman and Neutral Bay</a> </em><em>and has been selling residential real estate in Sydney since 1985. <br>He has also been writing real estate blog </em><em><a href="https://www.rwm.com.au/news/" target="_blank" title="Virtual Realty News" rel="nofollow">Virtual Realty News</a> </em><em>since 2000. </em></p>
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Data doesn’t lie when you keep misreading it: Robert Simeon

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<div><span style="line-height: 1.3em;">I'm in the midst of what will ultimately be my most comprehensive research project to date, and henceforth will aim to share a few high level viewpoints and findings on this blog page along the way.</span></div>
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<div>There are of course a multitide of factors which impact and drive housing markets ranging from macroeconomic drivers to monetary policy, and from consumption patterns to construction rates. </div>
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<div>But for today let's look briefly and specifically at Australia's demographics.</div>
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<div><strong><span style="text-decoration: underline;">Population pyramid</span></strong></div>
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<div>Looking below at an Australian population pyramid - which for the purposes of this blog post I have flipped on its side - representing the estimated resident population as at 2014, we can immediately observe a couple of salient points.</div>
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<div>Firstly, although Australia does have an ageing population, in part thanks to our immigration program the demographic profile of Australia is markedly different to those found in some other developed countries, and considerably less "top heavy".<br><br>With skilled migration in particular often having favoured those in the 21-30 age bracket, there is presently a relative dearth of people in my age bracket, that being the 31 to 38 year old cohort (see Point A on the below chart).</div>
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<div><a href="/images/2015/08/31/PP1.jpg" target="_blank">Click to enlarge</a></div>
<div><img src="/images/2015/08/31/PP1.jpg" alt=""></div>
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<div>Depending upon your preferred information source the average or "typical" age of first homebuyers in Australia now ranges anywhere from 31 to 34 years of age, and that figure could potentially levitate further due to a combination of lifestyle factors and increasingly stretched deposit gaps in the two major capital cities.<br><br>Of course, an "average" covers a wide range of ages and strains of buyer, but recent data has suggested that a comfortable majority of first homebuyers are now in their 30s or 40s.<br><br><strong><span style="text-decoration: underline;">Investors in the ascendancy...for now</span></strong><br><br>
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<div>The shape of the first chart above may therefore go some of the way to explaining the comparatively low volumes of homebuyers in the market through this cycle, with investors dominant to an an unprecedented degree, particularly in the largest capital city markets.<br><br>Naturally other factors have played a role here, particularly looser monetary policy which has encouraged those with existing equity generated through housing market ownership to redeploy it in a faithful manner.<br><br>Not only is there a relative paucity of 31 to 38 year olds where we might expect to find the bulk of first homebuyers, there is also an evident weak spot in the traditional "big spender" cohort.<br><br>Which is to say, there is a proportionate lull in the number of executives, senior managers and business owners commonly aged from around 45 to 55 (refer to Point B on the above chart).</div>
<br><div>While the wave of first homebuyers predominantly impacts dwelling prices at the entry level, it is those in these middle working years that are the heaviest spenders in the housing market, making their most material dwelling purchases at that stage in life.</div>
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<div>As you can see in the graphic above, the demographic pyramid does not present too kindly in respect of either cohort at the current time...and nor is it likely to do so for some years.</div>
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<div><strong><span style="text-decoration: underline;">Looking swell (2021-2027)</span></strong></div>
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<div>In fact, rolling the chart packs forward by calendar year we find that it is not until around around 2021 that the number of potential first homebuyers reaches a critical mass which might be considered compelling, with the number of 31 to 38 year olds in particular mushrooming to a total of more than 3.1 million (from around only 2.6 million in 2014).<br><br>In the period through to 2027, that number is projected to have expanded further still to more than 3.3 million. </div>
<div>
<br>As this effective "spending wave" passes through 2021, therefore, the demographic factors for Australian housing market growth look to be particularly favourable from that year until around 2027 inclusive.<br><br>As you can see in the second chart below, not only will the total population of Australia have swelled significantly by 2021 to around 26.5 million, the clamour of potential purchasers in the 31 to 38 year old age bracket (Point A below) really begins to amplify.<br><br>Furthermore there will be a coinciding wave of Australians approaching the latter half of their fourth decade (Point B below), the time of life at which they are likely to make their most consequential home purchases. </div>
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<div><a href="/images/2015/08/31/PP2.jpg" target="_blank">Click to enlarge</a></div>
<div><img src="/images/2015/08/31/PP2.jpg" alt=""></div>
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<div>This isn't to suggest here that the demographics for homebuyer activity then deteriorate after 2027 as such, rather that the projected figures then plateau for a period of time and thereby stop improving so impressively.<br><br><strong><span style="text-decoration: underline;">City winners and losers</span></strong><br><br>Drilling down to the next statistical level, it can be found that from around 2021 the demographic waves will become very favourable for Sydney, Melbourne, Brisbane and and <span style="text-decoration: underline;">particularly</span> Perth (assuming the superfluity of mining boom migrants opts to stay put, and interstate migration away from Western Australia doesn't begin to bite).<br><br>Hampered by an interstate migration "brain drain" these demographic waves do not suggest a favourable environment for the Adelaide housing market, with barely any improvement discernible over the same time horizon.<br><br>Meanwhile the latest projections suggest that Tasmania's housing market demographics could potentially worsen quite appreciably in the years leading up to 2035, although such longer term projections by their very nature tend to be less than reliable.<br><br><strong><span style="text-decoration: underline;">Dwelling starts</span></strong>
</div>
<div>
<br>While this is a blog post predominantly concerned with demographics, it's worth considering for a moment how the above findings tie in with the dwelling construction cycle.<br><br>Two of the "X-factors" which have impacted this housing market cycle have been an explosion in the volume of Asian capital invested in the Australian market and a hitherto unseen shift towards multi-unit construction.<br><br>Although 2015 will likely prove to be the market peak for dwelling starts, dwelling <em>completions</em> will remain elevated for the next few years.<br><br>In combination with a slowing rate of population growth, this will be one of the factors together with an erosion of yields which will eventually bring the current growth cycle to its end.</div>
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<div><a href="/images/2015/08/31/HIA.jpg" target="_blank">Click to enlarge</a></div>
<div><img src="/images/2015/08/31/HIA.jpg" alt=""></div>
<div> </div>
<div><span>Since natural population growth and net overseas migration will take some time to absorb the excess dwelling stock, this also points broadly towards 2021-2027 as a likely period for housing market growth.</span></div>
<div><span> </span></div>
<div><a href="/images/2015/08/31/AW1.jpg" target="_blank"><span>Click to enlarge</span></a></div>
<div><span><img src="/images/2015/08/31/AW1.jpg" alt=""></span></div>
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<div><strong><span style="text-decoration: underline;">Long run demographics are healthy</span></strong></div>
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<div>While the latest data suggests that over the short term Australia's populaton growth is likely to continue to slow, over the very long run the demographics of Australia are exceptionally compelling, with the population potentially set to almost double by over the next half century.<br><br>Also note that immigration is projected to keep the headcount in the potential homebuyer age brackets expanding to heights that agents and other industry participants can only dream of today.</div>
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<div><a href="/images/2015/08/31/PP3.jpg" target="_blank">Click to enlarge</a></div>
<div><img src="/images/2015/08/31/PP3.jpg" alt=""></div>
</div>
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<strong><span style="text-decoration: underline;">The wrap</span></strong><br><br>With life expectancies increasing there will evidently be a greater number of residents living well beyond the traditional retirement date in the decades ahead, although in time we might expect to see more folk working beyond the traditional retirement age too.</div>
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<div>The chart above implies that with the demand for capital city property likely to approximately double over the very long run, the likelihood of capital city land values in the landlocked inner- and middle-ring suburbs remaining anything less than singularly expensive appears quite remote.<br><br>Of course, it isn't possible to forecast or time markets so accurately, but over the near term there could easily be a relatively weak period ahead for housing markets as dwelling completions overtake demand, before a potentially strong rebound running broadly between 2021 and 2027. </div>
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<div>The most interesting and useful findings are those which incorporate the shifting composition of net migration at the suburb level, though I don't post detailed suburb research on my blog. </div>
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<p><span><em>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>.</em><br></span></p>
<p><em>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>.</em></p>
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Making waves in the Aussie housing market: Pete Wargent

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<div>
<em>CoreLogic-RP Data</em> reported a preliminary auction clearance rate of 75.1% for Sydney on Saturday with more than 1,000 auctions held over the week.</div>
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<div>APRA's cooling measures will hit lower socio-demographic areas first as lower income earners struggle with the deposit hurdle.</div>
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<div>The first region to go in Sydney will be the south west, and to a lesser extent the west.</div>
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<div>On the other hand the traditionally wealthier suburbs of the lower north shore, the eastern suburbs, and the inner west are poised to hold up much better. </div>
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<div>Unsurprisingly further research from the Domain Group showed that auction clearance rates held up to track at exceptionally high levels in the inner west (82.8 per cent), the lower north shore (82.3%), the northern beaches (79.6%) and the city &amp; east region (77.9%).</div>
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<div>On the other hand over the past two weeks auction clearance rates have tanked in the west (from 76.9% to just 66.3%), and particularly in the south west (from 69.8% to just 54.9%.</div>
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<div><a href="/images/2015/09/14/Auctions.jpg" target="_blank">Click to enlarge</a></div>
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<div><img src="/images/2015/09/14/Auctions.jpg" alt=""></div>
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<p><span><em>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>.</em><br></span></p>
<p><em>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>.</em></p>
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