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 Sales

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Tim Gurner, the Melbourne based property entrepreneur, has sold 1700 apartments in a single year.
The apartments are said to have brought in just under $1 billion for Gurner's company Gurner.
Since launching his first project in 2014 Gurner has quickly acquired a development book of over $2.1 billion, selling the 1700 apartments across 13 unique buildings across the eastern seaboard.
Tim's first venture, whilst studying at Melbourne University was a gym in Elwood.
"The gym was the best learning experience I could have asked for. 
"I think I learned more in the first four weeks of starting my own business from scratch with my own money than I did in three years at university".
Tim has also ventured out of the Melbourne market with a $600 million FV three tower precinct in Brisbane's Fortitude Valley.
The end of year caps off a huge year for Gurner who celebrated a record breaking 651 apartments sold totalling over $300 million just 12 weeks, followed by the success of the sell-out Ikebana in West Melbourne in just six weeks.
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jrobinson-rf4aSBido9

Tim Gurner notches up 1700 apartment sales in single year 

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The greatest volume of sales across Tasmania is in the mid-price residential market, according to Herron Todd White.
Herron Todd White's October Month in Review said during the second quarter of 2015 the southern suburb of Howrah, located on Hobart’s eastern shore, listed as good examples a circa 1960s, 147 square metre dwelling located on just over 600 square metres for $371,000 and an an older style, 104 square metre unit for $310,000.
"For this same period in the north the greatest number of sales in occurred in Legana. Examples of these sales include a near new, 98 square metre unit for $272,000 a modern, 245 square metre home on just over 900 square metres of land for $395,000, and an older style, 159 square metre home on a lifestyle block for $353,000," it said.
"For this same period in the north-west, the Devonport region is where the greatest number of sales in this sector occurred. Examples of sales include a new, centrally located, 99 square metre unit for $364,000, an older style, 203 square metre home located near to water for $377,000 and a modern, 131 square metre residence on a lifestyle block on the periphery of Devonport for $350,000."
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mick.cee-iDmgDDAmu8

Mid-price market most popular in Tasmania: Herron Todd White

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The annual Spring selection auction by Ray White Surfers Paradise saw more than $22 million in Gold Coast property change hands.
Thirty properties were auctioned with 141 registered bidders.
RWSP group CEO Andrew Bell, who has more than 14,000 auctions under his belt, said competitive bidding drove many sales well over the reserve.
“Collectively, properties that sold under the hammer achieved more than $1.5 million above their reserve prices,” he said. 
The RWSP Group recorded its third highest sales month in history in September, with $96 million in sales across its Gold Coast offices.
“Month after month we are seeing serious and competitive bidding at our in-room auctions which has allowed us to gain momentum heading into peak selling season.”
Previous highs were in the latter part of 2007, at the peak of the Gold Coast’s last property boom.
Bell said this reflected increased market share, resurgence of the local property market and success of the auction format.
“Auctions represent approximately half our sales, but it is this method of sale where we are seeing the most significant price growth,” he said.
Bell said his agency was also seeing the return of the owner-occupier market on the Gold Coast.
While the very top end of the market was slowly gaining traction, the $1-$2 million sector was seeing much activity, he added.
Ray White Surfers Paradise is the largest office in the Ray White Network and services the residential, prestige, commercial, industrial and marine sectors.
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j.ballantyne1990-6AQqhLzZaK

Buyers snap up properties worth over $22 million at Ray White's Gold Coast auction

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Non-bank lender Firstmac has indicated its reluctance to be involved in the funding of “vertically integrated” development schemes.
“What we are targeting is vertically integrated groups that have the same builder, lender, solicitor and marketing outset," Firstmac chief financial officer James Austin told Australian Broker. “I call them vertically integrated groups because they are one consortium who are developing the property and who own and are selling the property.
"They are using the same solicitors and then are marketing the properties offshore.
"So it is this concentration which is quite a high risk form of lending. 
"Therefore [Firstmac] have decided to pull out of that business.”
Austin noted it just happens that it is commonly overseas Chinese investors who are attracted to these sorts of schemes. “As we saw some of these types of loans coming into our pipeline, we sent a note out to our brokers saying that we would not do this type of business.
"It just so happened that the particular example we had at the time involved Chinese investors.
"But it is not the nationality or the borrower we are targeting – it is often the offshore resident which is susceptible to this marketing scheme and form –it is that type of vertically integrated type of operation.” According to Austin, these types of loans are higher risk due to concentration and conflict of interest, particularly in off-the-plan developments. “First of all you are getting concentrations in one area.
"You’ve got borrowers from overseas who are going to be less familiar with the true values of these properties. 
"In addition, when you’ve got this sort of integration going on, you’ve also got a conflict of interest where all the parties are working to one outcome – which is to build and sell properties. “I think the market is quite volatile right now given all the changes and development going on and I just think that off-the-plan is potentially a very problematic area.  “With funding being restricted across the industry, to investment particularly, I think that off-the-plan could become a very dangerous area.
"I think that there is a lot of development going on – both in Melbourne and in Brisbane – and I think that when they come to deliver it may be not a good place to be,” Austin told Australian Broker.
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jchancellor-FAypfDUnLy

Off the plan dangers sees Firstmac avoid highest risk Melbourne and Brisbane projects

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The latest Australian Property Monitors (APM) days on market heat chart indicates the Brisbane and Perth private treaty market slowed in September.
Sydney slowed, but Perth takes around three times longer to now secured a sale.
September property market offerings had a mixed trend across the country as to the required discounting before offerings were sold by vendors.
Sydney property vendors needed to knock 5% from asking prices with Perth vendors needing a 7.1% downwards adjustment. 
 
<a href="/images/2015/10/12/Days_on_market.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2015/10/12/Days_on_market.jpg" alt="">
According to APM, Sydney property vendors need to <a href="/news/sydney-property-vendors-needing-to-knock-5-from-asking-prices-apm-heat-chart">knock 5% from their asking price</a>.
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Perth now the slowest property sales market in country: APM heat chart

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GUEST OBSERVER
A pick-up in the housing sector was a necessary part of the adjustment in the Australian economy following the end of the mining boom.
 The RBA started cutting interest rates in 2011, home buyers returned, home prices rose and this has all encouraged a dwelling construction boom that has helped offset the mining investment slump. However, as always the surge in home prices has refocussed attention on whether there is a property bubble and how it might end. 
Analysing the Australian residential property market is a bit like Groundhog Day as the big picture fundamental issues don’t really change much in that Australian housing is expensive, affordability is poor, household debt is high and there is a constant debate as to whether there is a crash around the corner. This has been the case ever since 2003. 
So quite clearly the issues around the property market are much more complex than many would see them. This note takes a look at where we are now in the Australian residential property cycle and implications for investors. 
Overvalued with too much debt... 
At a big picture level it’s hard to get away from the view that Australian property is expensive and household debt is high:
According to the 2015 Demographia Housing Affordability
Survey the median multiple of house prices to household income is 6.4 times in Australia versus 3.6 in the US and 4.7 in the UK.
On the basis of the ratio of house prices to rents adjusted for inflation relative to its long term average, Australian houses are 37% overvalued and units 14% overvalued.
The ratios of house prices to incomes and rents in Australia are at the high end of OECD countries. By contrast the US is near the low end in the OECD.
Real house prices have been running above trend since 2003. While the excess above trend eased from 2010 it has blown out again in the last two years. 
<a href="/images/2015/10/13/Screen%20Shot%202015-10-13%20at%203.23.20%20PM.png" target="_blank">Click to enlarge</a>
<img src="/images/2015/10/13/Screen%20Shot%202015-10-13%20at%203.23.20%20PM.png" alt="" width="632" height="360">
The shift to overvaluation has come higher household debt. The next chart shows the deviation in house prices from their long term trend against the ratio of household debt to income. 
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Naturally all of this has led to concern that Australia is in a housing bubble that will inevitably burst.
...but not as simple as it looks
However, it’s not as simple as this:
First, the big surge in home prices and household debt actually took place from the late 1990s into early last decade. Since then measures of overvaluation and the debt to income ratio haven’t changed much (esp after allowing for mortgage offset accounts). See the last chart. In other words the surge in home prices and debt was unrelated to the mining boom, except in some cities like Perth.
Second, the claims around negative gearing, foreign and SMSF buying driving the problem don’t really stack up: negative gearing has been around for a long time and while foreign and SMSF buying has played a role it looks to be small and foreign buying is concentrated in certain areas.
Third, a more fundamental factor explaining the persistence of “overvalued” home prices in Australia relative to other countries is constrained supply. Australia has had a chronic undersupply which has been worsening until recently. This can be seen in the next chart which tracks housing starts versus underlying demand. The cumulative undersupply on this measure reached above 100,000 dwellings last year. The main reason behind the slow supply response appears to be tough land use regulations in Australia. 
 
<a href="/images/2015/10/13/Screen%20Shot%202015-10-13%20at%203.37.00%20PM.png" target="_blank">Click to enlarge</a>
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Fourth, while household debt has gone up a lot there has not been anything like the deterioration in lending standards seen in other countries. Much of the increase in debt has gone to older, wealthier Australians. Bad debts and arrears remain low. While loan size has increased, Australians’ seem focussed on cutting their debt once they get it.
Finally, while Sydney and Melbourne have had all the characteristics of a bubble of late (overvaluation, rapid price gains, a desire to get in for fear of missing out), the rest of Australia has not. So it’s dangerous to generalise. 
<a href="/images/2015/10/13/Screen%20Shot%202015-10-13%20at%203.38.37%20PM.png" target="_blank">Click to enlarge</a>
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Despite all these qualifications, high house prices combined with high household debt to income ratios suggest Australia is vulnerable should something threaten the ability of households to service their mortgages. As such the RBA and APRA have been right to try and slow the property market down.
So where are we now?
Our assessment is that the national property market is cooling. 
APRA’s measures to slow lending to property investors are clearly biting with lending to investors slowing.
The Westpac-MI consumer sentiment survey shows a sharp fall in consumers’ assessment as to whether now is a good time to buy a dwelling, led by NSW.
Auction clearance rates have slowed. 
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However, this slowdown is likely to be concentrated in Sydney &amp; Melbourne, which are likely to see price growth slow to around 5% over the year ahead. Price growth is likely to remain negative in Perth and Darwin as the mining boom continues to unwind. Hobart &amp; Adelaide are likely to see continued moderate property growth, but Brisbane may start to pick up a bit.
Nationwide price falls are unlikely until the RBA starts to raise interest rates and this is unlikely before 2017. And then in the absence of a recession or rapid interest rate hikes price falls are more likely to be 5-10% as was seen in the 2009 and 2011 down cycles than anything worse. In fact, the cooling in investor demand in Sydney and Melbourne are likely to provide greater flexibility for the RBA to cut interest rates again.
What to watch for a harder landing?
I would nominate the following:
A recession – much higher unemployment could clearly cause debt servicing problems and hence forced sales. The risk at present looks manageable though at around 20%.
A surge in interest rates – but the RBA knows about the increased debt sensitivity of households so this would require the RBA to get it wrong badly.
Property oversupply – this is a risk but would require the current construction boom to continue for several years. 
Implications for investors 
There are several implications for investors: 
First, over the very long term residential property adjusted for costs has provided a similar return for investors as Australian shares, at around 11-11.5% pa. So there is role for residential property in investors’ portfolios.
Second, housing is looking somewhat less attractive as a medium term investment. It is now expensive on all metrics and offers very low income (rental) yields compared to all other assets except bank deposits and Government bonds. The gross rental yield on housing is around 2.8% (after costs this is around 1%), compared to yields of 6% on commercial property and 6.7% for Australian shares (with franking credits). This means that a housing investor is more dependent on capital growth to generate a decent return.
 
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Third, these comments relate to housing in aggregate. For those who want to look around there are pockets of value, eg in regional areas. You just have to look for them.
Finally, investors need to consider their exposure to Australian residential property generally. As a share of total household wealth its nearly 60%. Once allowance is made for indirect property exposure via Australian shares (banks, property trusts, etc) it’s even higher. I am not in the property crash camp but the risk of it does reinforce our assessment that Australian investors should have a decent exposure to say unhedged global shares because it could provide an offset should something go wrong with Australian housing. 
 
<a href="https://www.propertyobserver.com.au/https://plus.google.com/110172465327488162875?rel=author" target="_blank">SHANE OLIVER</a> is head of investment strategy and economics and chief economist at <a href="https://www.ampcapital.com.au/home" target="_blank">AMP Capital</a> and is responsible for AMP Capital's diversified investment funds. 
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The Australian housing market starting to cool (in parts): AMP Capital's Shane Oliver

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Chief executive officer of McGrath Estate Agents John McGrath has outlined his top five picks for the Brisbane area and Queensland housing market, with the former industrial area of Murarrie looking ideal for those priced out of other areas.
In the McGrath Report 2015 he said properties in Brisbane and Gold Coast suburbs such as Paddington, Everton Park, Birtinya and Paradise Point are worth keeping note of.
"Murarrie, Brisbane has long been seen as a largely industrial area but today it is coming of age as young singles, couples and families priced out of nearby Bulimba, Morningside and Cannon Hill venture in looking to renovate," he said.
"Everton Park, Brisbane offers a huge range of properties to suit every buyer demographic and there is plenty of value for money. Investors and first home buyers are competing strongly for the lower priced homes.
"Paddington, Brisbane presents the best value among all of Brisbane’s blue chip suburbs. Over the past two years, Paddington buyers have been venturing into Bulimba, Ascot, New Farm and Hawthorne looking for better value. Now they are returning following a rejuvenation of Paddington’s café scene.
"Paradise Point, Gold Coast is located between Hope Island and the mesmerising Gold Coast Broadwater. It has a wonderful burgeoning café scene and offers four bedroom houses around $700,000 just 200 metres from the water.
"Birtinya, Sunshine Coast offers great value and there is plenty of room for growth as the suburb continues to benefit from the ongoing development of the Kawana health precinct."
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Murarrie leads John McGrath’s top five Queensland picks

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Having sold Headingley House in Woollahra, John Spender QC is off to Double Bay.

He has paid $3.975 million to buy in Juliana Lim's Oceania complex on Bay Street, the Bay Residences , a 14 apartment complex designed by Kann Finch architects. The legal paperwork shows the lawyer transfered the home into joint ownership with wife Catherine earlier this month under 104B of the Duties Act.

Estate agency 1st City Hasemer &amp; Caldwell.Eyles - Double Bay has one left.

Headingley, which was his diplomat father, Sir Percy Spender purchase from the Kater pastoralist family in 1949 for £11,676, fetched $13.1 million.

It was bought by New York fund manger Alwyn Heong who sold in his Rose Bay harbourfront Indah for $27.08 million to barrister Georgina Black, the partner of Graham Edwards, chief executive of the UK’s property giant Telereal Trillium.

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The LJ Hooker Bill Malouf marketing says the 1880s Woollahra house had been redesigned by acclaimed architect Professor Leslie Wilkinson in the 1930s.

Spender, the dapper Queen's Counsel, who now does commercial arbitration, moved into the stunning Georgian-style Wellington Street residence in 1985.

While he was the Member of the House of Representatives for the seat of North Sydney - before Joe Hockey's election - he would occasionally take the trip from his eastern suburbs home to the lower North Shore electorate in his late father's white Rolls Royce.

This article first appeared in the Sunday Telegraph.
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John Spender buys $3,975,000 Double Bay apartment after Headingley House sale 

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A architecturally designed residence at Hamilton in Brisbane’s inner north has been sold for $3.05 million.
The modern home at <a href="https://www.realestate.com.au/property-house-qld-hamilton-119766351" target="_blank">141 Crosby Road, Hamilton</a> was sold to a bank executive through North South Real Estate’s Drew Davies.
Mr Davies said the buyer had been living in London and has returned to Australia with their family.
“The buyer loved the home’s position high on Hamilton Hill as well as the sense of space, style and privacy that is evident the moment you walk through the door,” he said.
With six bedrooms and five bathrooms, the home features a gym and steam room, wine cellar, billiards room, sitting room, dining room and eight seat cinema.
Mr Davies said the property had previously been on the market with another agency for three months and a failed auction campaign.
“The property was sold to the first buyer I showed through the home,” he said.
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Hamilton Hill home sells for $3.05 million

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The top sale of the week was a five bedroom, five bathroom freestanding home in Toorak, according to CoreLogic RP Data.
140 Kooyong Road, Toorak, Vic (above) sold by private treaty for $9,980,000.
Proudly positioned on 1190sqm, the home was designed by the architectural firm Workroom Design and crafted by AGUSHI Builders in gardens designed by Jack Merlo. 
The use of Off-form Concrete as a finished material is offset by a luxe pallet of Smoked European Oak joinery and travertine flooring, Italian stone bench tops and architectural fixtures giving the house a prestige unsurpassed. The home was marketed as utilising the the best in technology in heating and cooling (Hydronic and reverse cycle), hot water, home automation (CBUS), Audio visual technology, security, solar panelling and double glazing thereby achieving a 9 star energy rating to minimise ongoing energy costs.
 
Top Ten
140 Kooyong Road, Toorak, Vic 5 bed, 5 bath, 4 car house $9,980,000 Castran Gilbert Aust Pty Ltd 
88 Elizabeth Bay Road, Elizabeth Bay, NSW 4 bed, 3 bath, 3 car house $7,400,000 McGrath Estate Agents 
2 Alton Street, Woollahra, NSW 3 bed, 2 bath, 2 car house $6,600,000 BradfieldCleary Double Bay 
269 Cobbitty Road, Cobbitty, NSW 9 bed, 8 bath, 6 car house $5,450,000 Bos Realty Carnes Hill 
5 Private Road, Northwood, NSW 5 bed, 4 bath, 3 car house $5,380,000 McGrath Estate Agents 
33 Finch Street, Malvern East, Vic 4 bed, 3 bath, 4 car house $5,230,000 Jellis Craig Armadale 
12 Arthur Street, Bellevue Hill, NSW 5 bed, 4 bath, 2 car house $5,150,000 BradfieldCleary Double Bay 
27 Dorking Road, Cabarita, NSW 4 bed, 2 bath, 3 car house $4,661,000 Raine &amp; Horne Concord 
30 Campbell Street, Kew, Vic 4 bed, 4 bath, 6 car house $4,210,000 Marshall White Hawthorn 
65/299 Forbes Street, Darlinghurst, NSW 3 bed, 2 bath, 2 car unit $4,020,000 BresicWhitney Darlinghurst  
 
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Source: CoreLogic RP Data
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