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.

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;

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;

“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;

[smartcode_project:default project_id=110291 project_image_fid=302785]

<h2>Affordable product leads, premium demand remains resilient</h2>

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;

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;

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.

Jual (Shenton Park, Celsius Property) also posted a strong quarter with 28 sales, reaching 39% sold in one quarter.

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;

[smartcode_project:default project_id=148957 project_image_fid=364102]

<h2>Prices underpinned by costs, and the delivery risk is growing</h2>

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.

David Cresp said a growing challenge for private Build‑to‑Sell developers is simply securing a builder in the current environment.

“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;

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.

[smartcode_project:default project_id=108869 project_image_fid=317905]

<h2>Supply: improving later, but still constrained, and Perth lags eastern benchmarks</h2>

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;

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;

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”.

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;

Joel Robinson

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

<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.

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.

Sammut Director Julian Sammut said the group had been actively searching Brisbane for several years before identifying Toowong as the right fit.

“Brisbane was the right step for Sammut,” Sammut said.

“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.”

<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" />

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.

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.

“We are DA approved now which is very exciting,” Sammut said.

“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.”

<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" />

Bureau^proberts said the design responds to Toowong’s evolving urban character, balancing contemporary apartment living with the area’s established residential identity.

“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.

The architecture practice said the project’s form was shaped by its riverfront setting, flood considerations, neighbouring building scales, and view corridors.

“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.”

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.

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.

Sammut secures approval for debut Brisbane apartment development in Toowong

Developer Lanevick is heading back into Sydney’s apartment market after focusing more heavily on the luxury townhouse and terrace sector in recent years.

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.

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.

“Traditionally it’s been difficult for people in that market to downsize because there just hasn’t been the right product available,” Maroun said.

“We’re targeting buyers who might have 30 to 40 per cent of their house value sitting in the bank after downsizing.

“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.”

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.

“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.”

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.

“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.”

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.

“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.

Maroun said Lanevick saw a first-mover advantage within the precinct as planning controls continue to evolve to accommodate greater housing density.

“We think there’s a real opportunity there that hasn’t really been serviced properly yet,” he said.

“There’s going to be a broader evolution of the whole Gladesville village precinct over time, particularly with more activation and mixed-use outcomes.”

The Venus Street proposal will include a commercial and retail component at ground level designed to contribute to that evolving streetscape activation.

“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.

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.

&nbsp;

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

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.

The New York-based investor has focused his firm, GreenPoint Partners, on addressing the supply shortage hitting middle market housing in Australia.

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.

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.

“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.

“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.”

<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" />

GreenPoint Partners brings years of experience assembling and scaling real estate operating businesses across major markets. And Green sees a big opportunity in Australia.

“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.”

Green said being a builder-developer would give the company the capacity and flexibility it required to deliver reasonably-priced homes.

“We want it to be at that attainable level; not super high end luxury but at that attainable level,” he said.

<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" />

&nbsp;

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.

Green praised local policy settings.

“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.”

One Living is also&nbsp;looking at high-density projects and could take on more institutional funding in the future.

“The way we will be able to achieve economies of scale is through size,” Green added.

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

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.

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.

Projects by Buxton Director Heath Thompson, who is selling WM Residences, says the townhouses x that perfect middle ground be

"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.

"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."

[smartcode_project:default project_id=134646 project_image_fid=6109]

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.

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.

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.

[smartcode_project:default project_id=134646 project_image_fid=6110]

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.

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.

[smartcode_project:default project_id=134646 project_image_fid=6116]

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.

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.

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.

[smartcode_project_cta:default project_id=134646]

WM Residences fills gap in Mordialloc townhouse market

Property News

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GUEST OBSERVER
The Melbourne Institute (MI) Inflationary Expectations are reported as a 30% symmetric trimmed mean utilising all responses except for the ‘don’t know’ responses. Compared to the previous old trimmed mean, this adds 2ppt to the level of the index (below).
<a href="/images/2015/10/16/Screen%20Shot%202015-10-16%20at%2011.00.04%20AM.png" target="_blank">Click to enlarge</a>
<img src="/images/2015/10/16/Screen%20Shot%202015-10-16%20at%2011.00.04%20AM.png" alt="" width="1010" height="605">
 
But the new series appears to express greater cyclical amplitude (charts below) which can be useful for picking turning points in the inflation cycle.
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In September, consumer expectations for the annual pace of inflation lifted to 3.5% from 3.2% and now on a moderating trend since the 4.0% print in May 2014. The trend is now 3.4%yr and has been so since April 2015. Expectations continue to remain well below the average since 1995 of 4.5% (chart below).
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Inflationary expectations remain well contained. Despite an expectation for some pass-through to consumer goods from the weaker Australian dollar, we are yet to see these have any impact on consumers’ inflationary expectations.
Justin Smirk is ‎senior economist, Westpac Group and can be contacted <a href="https://www.westpac.com.au/about-westpac/westpac-group/" target="_blank">here</a>.
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jchancellor-FAypfDUnLy

Inflationary expectations remain well contained: Westpac's Justin Smirk

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Property on Queensland's Sunshine Coast has had strong enquiry levels and good sales volumes, according to Herron Todd White.
Herron Todd White's October Month in Review found the the highest growth in sale volumes and values in the first half of 2015 was in the sub $500,000 housing market which is bleeding into the $600,000 to $700,000 bracket.
"Sub $550,000 housing on the coastal areas continues to be extremely popular with buyers placing a greater emphasis on the underlying land value of the property," the report noted.
"Two examples of the market movement over the two years are from Peregian where one property sold in January 2013 for $466,000 and resold in March 2015 for $515,000 and another was purchased in May 2013 for $482,000 and has recently sold for $560,000. 
 
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Sunshine Coast sales volumes stable: Herron Todd White

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The housing market between $300,000 and $400,000 in Warrnambool is hot at the moment, according to Herron Todd White.
Herron Todd White's October Month in Review found three bedroom brick veneer houses in North Warnambool built within the last decade as particularly hot, with interest driven by strong rental returns for investors.
"The drivers behind this market are the strong rental returns investors can expect to achieve and the affordability for young families who want something new without the hassle of building," HTW noted.
"Although there is somewhat of a demand for this type of property we have not seen significant increases in value due to the current supply of land within Warrnambool. This statement is true for the entire Warrnambool residential property market which has seen little increase over the past 24 to 36 months.
"Due to the current availability of residential land and demand for newly constructed dwellings, older constructed dwellings appear to be the property type being hit hardest, with a decrease in value and demand for properties built in the 1980s and mid 1990s. This current trend appears to be sustainable for the foreseeable future."
The local unit market, according to HTW, are in good demand at present with two-bedroom units priced between $225,000 and $275,000, and newly constructed three-bedroom units priced between $325,000 and $375,000.
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Warrnambool housing market heating up: Herron Todd White

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At Property Bloom we are always trying to improve our process.  We put a lot of time and effort into designing our villas, houses or units whether they be for a dual occupancy or multi unit project, we want our finished product to look better than the standard 'investor stock'.
Of course, we need to do this in a cost effective way and so I've found that spending time on key areas like front façades, kitchens and bathrooms can add a wow factor without breaking the budget.
I read this great story about <a href="https://www.houzz.com.au/ideabooks/53600916/list/12-hot-kitchen-trends-set-to-sizzle-in-2016" target="_blank">12 hot kitchen trends</a> and was pleased to see we were meeting seven of the twelve trends in the kitchens we are building right now.
Here's a photo of a kitchen in one of our recently completed developments:
<img src="/images/2015/10/16/Screen%20Shot%202015-10-16%20at%209.45.50%20AM.png" alt="" width="508" height="325">
 
Timber features for kitchens continues to trend. We've used it in our kitchen to add warmth and it was nice to see the report notes that walnut tones  will be trending next year. The timber cupboards we've used are Polytec European Walnut. 
You can also add texture by using a textured product to your cupboards. We did this by using a textured melamine to the timber areas. Which brings me to the next trend - texture.
 Most kitchen manufacturers offer a good choice of textured laminate benches or melamine cupboards and they are usually the same price as flat surfaces.  You can add texture to your splashback tile. We have used a softly lined splashback tile, although it's hard to see in the photo.
We purposely kept the main cabinetry neutral which ticks another trend box. We only wanted two main features for the kitchen which is the use of timber and stone for the benches.
Thin benches are in and it's goodbye to chunky style benches.  This is a relief as we used a thin, engineered stone bench with mitred edges. This was a choice more around cost than trend as the thicker bench tops were more expensive.  
<img src="/images/2015/10/16/Screen%20Shot%202015-10-16%20at%209.46.48%20AM.png" alt="" width="553" height="340">
Engineered stone benches have become so well manufactured that it can be hard to tell the difference from natural materials.In an investment property it doesn't make sense to use real marble or granite so we are meeting the trend to use engineered materials. I love the wider choice of colours and tones you can get from the various supplies of engineered stone benches. It's important your bench works in well with your flooring, especially if you are using a mitred or waterfall edge where the bench will meet the floor.
Speaking of flooring, we've used a stone look floor tile with a polished finish. I like the floor to reflect light which can give the impression of a large, clean space. But perhaps this is not right on trend as I think more natural and matt finishes are in right now.
For our pendant lights, we've used a small white pendant with a silver foil lining inside it. This adds a little touch of glam. So we are only just half ticking the trend of using precious metals. If you really want to be on trend you should incorporate some brass, cooper or gold which may be used in the lighting, tapware, rangehood or splashback.But we didn't want to compete with the natural timber tones that were already a feature. Be careful not to have too many features as they can compete with each other giving you a cluttered or busy look.
<img src="/images/2015/10/16/Screen%20Shot%202015-10-16%20at%209.47.32%20AM.png" alt="" width="436" height="277">
I find designing the kitchens and choosing the colours one of the most enjoyable parts of property development and valuers have told me that a well designed, spacious kitchen with quality features will add value to your property. If you'd like to know just how much this kitchen cost us, then send me an email and I'll be happy to share.      
Jo Chivers is chief executive officer of property development project managers <a href="https://www.propertybloom.com.au/about" target="_blank">Property Bloom</a>.
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jochivers-wq5Bp59R5a

Is your property development ticking kitchen trends?: Jo Chivers

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Property industry salary rises are creeping up, according to the findings in the Avdiev Property Industry Remuneration Report 2015 October update.
Salary rises vary across market sectors and seniority of staff, it found.
Real estate agency senior staff and built environment consultant mid- level staff and juniors were the major recipients. 
Senior employees have been the beneficiaries of the usual full pay increases granted in the last reviews, most other levels of staff have enjoyed a 3% pay rise with the notable exception of the retirement living/aged care market sector, where only junior staff were given a 3% pay increase.
The median annual pay rise of 3% across all property, investment and construction markets and the built environment consultants has not varied since last year.
Predictions for next year continue at 3% overall, but property development higher for all levels.
Short term and long term incentives have remained unchanged for majority of senior staff and forecast to remain the same for 2016.
<a href="https://www.avdiev.com.au/" target="_blank">The authoritative 29th report</a> found 71% of responding companies were happy with their recent business performance.
“Business and consumer confidence have improved recently” said Rita Avdiev, Managing Director of The Avdiev Group, remuneration consultants. 
“This is particularly evident in NSW where the whole property and built environment consulting industry is buzzing in every market sector.”
The latest Avdiev Remuneration Report October Update, the product of a formal Australia wide survey of property, investment, construction employers and built environment related consulting companies, finds that business conditions have improved for 52% of respondents and remained stable for 41%.
Only 7% reported a drop in company performance from 12 months ago. 
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Property industry salaries rising: Avdiev

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GUEST OBSERVER
When a couple of gloomy reports are produced on the housing market, it is always good to get a calm, reasoned view from the Reserve Bank. Reserve Bank Deputy Governor Philip Lowe believes we are at the point “where supply is kicking in” in the Sydney housing market.
In other words, demand for homes has been strong, exceeding supply, and resulting in strong growth of home prices. But now Lowe believes that more homes are being built to meet the strong demand and that should lead to more modest growth in home prices.
The Reserve Bank Deputy Governor does warn that “people need to be careful” when it comes to the housing market – and that is always useful advice. But the Deputy Governor has clearly distanced the RBA from some of the housing market ‘gloom and doom’ stories.
The Reserve Bank Deputy Governor dismissed assertions that business and consumer confidence were weak (“that is just not right”). And with exquisite timing, consumer confidence lifted 5.1 per cent in the latest week while business confidence also improved. But we shouldn’t be under any illusions – consumers like a stronger Aussie dollar and the dollar soared last week. We can wrap it up in different ways, but the dollar no doubt had a lot to do with boosting sentiment levels.
The latest business survey was solid. Business sentiment rose and operating conditions are well above “normal” – in fact the smoothed measure of business conditions hit 5-year highs. In addition, the employment component of the survey hit a 4-year high and there were more signs of inflationary pressures.
The one area of concern is that businesses still aren’t keen to borrow. Almost 80 per cent of firms indicated that no borrowing was required in September. This may mean that businesses are living within their means. But with interest rates at record lows, the absence of borrowing is surprising.  
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What do the figures show?
National Australia Bank Business Survey:
The NAB business conditions index eased slightly from +9.2 points to 9.1 points in September but the rolling annual average hit a 5-year high. The business confidence index rose from +0.8 points to 5.1 points. The survey was conducted from September 24 to 30. 
NAB noted: “There remains, however, a notable divergence in business conditions across industries. Services industries continue to outperform, while the mining industry trails well behind. It is promising though that mining and manufacturing were the only industries to report negative conditions – just the second time only two industries have been negative since mid-2011.”
“Not all industries saw a lift in confidence, however, with the improvement largely concentrated in transport/utilities (up 14) and personal services (up 12). Both these industries are enjoying the highest confidence levels (at +13 and +16 points respectively); while unsurprisingly mining firms were least confident (at -14).
Components. The index of trading conditions fell from +19.1 to +15.4; employment rose from minus 0.8 points to a 51-month high of +4.5 points; profitability eased from +10.4 points to +7.6 points; forward orders fell from +4.6 points to +2.8 points.
Inflationary indicators were higher in September. The monthly reading of labour costs rose at a 0.6 per cent quarterly rate in September, up from 0.5% in August. Purchase costs rose at a 1.0% quarterly rate in September, after a 0.8% rise in August. Final product prices were up 0.2% in September. And retail prices were up by 1.2%t in September after a 0.7% rise in August.
Capacity utilisation rose from 81.2 to a 44-month high of 81.3%, matching the result in June. Capacity use is above the long-term average of 81.0%.
The proportion of firms reporting that they did not require credit rose from 52% in August to a record high of 79% in September.
Consumer sentiment
The weekly ANZ/Roy Morgan consumer confidence rating rose by 5.1% to a 15-week high of 115.6 in the week to October 11. Confidence is up 1.6% over the year and above the average of 111.4 since 2014.
All of the five components of the index rose in the latest week:
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<li>The estimate of family finances compared with a year ago was up from +4 to +9;</li>
<li>The estimate of family finances over the next year was up from +22 to +30;</li>
<li>Economic conditions over the next 12 months was up from -4 to -1;</li>
<li>Economic conditions over the next 5 years was up from +2 to +13;</li>
<li>The measure of whether it was a good time to buy a major household item was up from +26 points to +27 points.</li>
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Speech by Reserve Bank Deputy Governor
Reserve Bank Deputy Governor, Philip Lowe, delivered a speech “Fundamentals and Flexibility” 
“I would like to focus on a different set of fundamentals: that is, the fundamentals of the Australian economy. My central message is that these fundamentals are strong and that they provide us with the basis to be optimistic about the future.” 
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In terms of economic fundamentals, Lowe highlighted five factors: the institutional framework; “our people”; mineral resources; agricultural assets; and “our links with Asia and our expertise in delivering high-quality services.” 
“Together, this combination of fundamentals should provide us with confidence that we can continue to experience advances in our living standards. It is a combination of fundamentals that few other countries enjoy.”
Philip Lowe highlighted a number of areas that affect flexibility such as exchange rates; and the financial system.
Philip Lowe highlighted four factors outside central bank control that improve flexibility of the economy: the competitive environment in which firms operate; incentives to innovate and to start new businesses; operation of the labour market; and the nature of our education system.
What is the importance of the economic data?
The monthly National Australia Bank business survey is valuable in providing a timely reading about the health of Corporate Australia. Key indicators of business conditions such as orders, employment, profitability and capacity use are covered together with a gauge on confidence levels.
The ANZ/Roy Morgan weekly survey of consumer confidence closely tracks the monthly Westpac/Melbourne Institute consumer sentiment index but the former measure is a timelier assessment of consumer attitudes and is now closely tracked by the Reserve Bank.
What are the implications for interest rates and investors?
The Reserve Bank Deputy Governor has admitted that interest rates are less effective than they used to be. So the Reserve Bank won’t be rushing to change interest rate settings. The good news is that the Reserve Bank Deputy Governor remains very positive on the outlook and that is backed by the latest economic data. In short, there are simply no reasons to be touching rates.
The environment remains positive for businesses selling consumer goods and services. The outlook for family finances – the part of the consumer sentiment survey that the Reserve Bank tracks closely – hit a 20-month high in the latest week.
No one should get too complacent on inflation. The NAB business survey notes “Consumer price pressures building” with retail prices lifting at the fastest quarterly rate for over three years.
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Craig James is the chief economist at <a href="https://www.comsec.com.au/default.aspx" target="_blank">CommSec</a>.
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RBA says Sydney supply kicking in: CommSec's Craig James

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There is no one correct strategy for successful property investment.
There are many diverse ways to grow your wealth with residential real estate. The best strategy depends on the individual. 
But the various methods have one thing in common. They work only if the individual investor implements the plan with intelligence and diligence.
I’ve been involved in a series of seminars in recent weeks, as a speaker and as an organiser. I’ve witnessed discussion of numerous investment strategies. They all work, so long as the individual investor is accesses good information, taps into quality advice and makes good locational choices. 
I’ve presented at a number of seminars organised by Melbourne-based Performance Property Advisory. This business has a very clear approach to property investment on behalf of its clients, based on a singular focus on the one capital city that presents the best buying opportunities and potential for capital growth. Three years ago it was Sydney and more recently Brisbane was the focus.
The approach is very much quality homes in inner-city suburbs. From what I can tell, it works well for Performance Property’s client base. It’s a good strategy but there are others equally valid.
One of the approaches used by Brisbane-based PPI Advice is creating equity by buying houses where the land and zoning allow additional dwellings on the property. They’re focused primarily on inner and middle-ring suburbs of Brisbane, when the housing and amenities are of a high standard.
I’ve seen examples where investors have had considerable success with this kind of value-adding exercise. Done well, equity of $400,000 or $500,000 can be generated on one property.
On Saturday I spoke at a Melbourne seminar organised by Louise Lucas and the Property Education Company. Other speakers included clients of the business who have built substantial portfolios of well-performing properties by buying in affordable suburbs of capital cities and in good regional centres.
Some of the properties featured were what I sometimes refer to as “ugly real estate” – the kind of houses that make you think “I’m not sure I’d want to live in something like that”, located in downmarket suburbs with a certain kind of reputation.
But I know from three decades of research that ugly real estate grows strongly in value if it has certain qualities. If it’s solid, affordable and well-located in terms of public transport, schools and shops, it’ll appreciate in value. It doesn’t need to be pretty to achieve good capital growth.
Many downmarket suburbs have excellent capital growth rates. That’s why I often urge investors not to be real estate snobs. The key question is not “Would I be happy to live there?” but “Who would be happy to live there?”
People may aspire to live in the prime suburbs but most can’t afford it. They buy where they can afford the prices. If it’s solid and located near desirable amenities and jobs nodes, they’ll overlook a lot. 
That’s why the greatest demand goes to the cheaper areas. 
That’s why 234 people bought in Toorak (median $3.1 million) in the past year, but 801 in Frankston ($388,000) and 1,187 in Point Cook ($470,000). Houses sell twice as fast in Frankston as in Toorak and the rental yields are double.
Which is the right way to do it? It depends on the individual, where their preferences lie and how much they can afford to pay.
They’re all the right way – if the individual investor goes about it the right way. The right way includes undertaking genuine research and being prepared to pay for good information and quality advice.
 
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>
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Don't be a real estate snob: Terry Ryder

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First home buyers and investors are breathing life into the Perth residential property market, in particular the sub $450,000 price bracket, according to Herron Todd White.
Herron Todd White's October Month in Review said modern units and villas in established areas appear to be attracting the highest level of interest, but at a price attractive when in comparison to sale history.
"Overall, sales transactions are down some 18% on the same time last year while stock on market is some 40% higher, with control having well and truly shifted to buyers, as opposed to sellers," HTW noted.
"We wouldn’t say that any sector is running hot at this point in time, however we note that new or near new properties which are well presented and accurately priced are transacting in shorter time periods than traditional renovator properties. The heat has also well and truly dissipated from the development market, which appears to have peaked early this year, with some suburbs indicating a 10% price adjustment from peak levels, including in Balga, Rivervale and East Cannington.
"The market is largely being driven by first home buyers and investors - hence affordability is the key. While modest compared to 2014 levels, sales of modern 3-bedroom, 2-bathroom dwellings on lot sizes ranging from 300 to 450 square metres in establishing suburbs are dominating the market. Examples include Piara Waters ($450,000 to $525,000), Lakelands ($320,000 to $370,000) and Aveley ($400,000 to $450,000)."
 
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Price adjustments in Perth's Balga, Rivervale: Herron Todd White

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Sydney held 1,141 auctions for the week ending 11 October with a preliminary clearance rate of 72.8%, according to CoreLogic RP Data.
This time last year 918 auctions were held with a clearance rate of 71.9%.
The Northern Beaches had preliminary clearance rate of 88% and the Eastern Suburbs 85.5%.
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Sydney's Northern Beaches nets clearance rate of 88%: CoreLogic RP Data

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Builder Phil Emanuele and wife Nicky have been breaking residential records in the South Coogee area for a decade of so, and now they hope 14a Mermaid Avenue, Maroubra will likewise set a new record.
They reckon the home sets a high benchmark for design and living, so their pricing through Clint Ballard at Ballard Property is $6.5 million plus. 
Set on its 450 sqm block, there is around 800 sqm internal space at the house with innovative rock coat render that doesn’t require painting. Even the external timber is called Parklex from Spain, a treated veneer that never needs any maintenance. Plenty of copper external features too. 
The couple won the Asia Pacific Property award for their last design at 8 Bloomfield Street, South Coogee which was briefly owned by Paul Roos, the former Swans Coach.
Just this week Maroubra benefited from China’s Golden Week with an oceanfront home on Mermaid Avenue fetching $10.5 million, selling to buyers from Shanghai. The oceanfront property was sold accountant Anthony George to buyers had flown into Sydney during the eight-day Chinese holiday period.
The oceanfront home on Mermaid Avenue did have initial hopes of $15 million earlier this year.
The oceanfront property, covering 6156 square metres, was sold accountant Anthony George to buyers had flown into Sydney during the eight-day Chinese holiday period
The seven bedrom home came with four-car garage, tennis court and pool on Mermaid Avenue.
It last traded in 1999 for $3.02 million when sold by lawyer John Gerathy.
The sale tops the suburb’s previous high of $8 million sit in 2007 for the oceanfront house on Waterside Street owned by Leslie Mosca, director of plastics and resin manufacturer Hpfox when sold by the Yu family.
This article fist appeared in the Sunday Telegraph.
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