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

Rental Yield

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With rental yield being a key metric for a buyer, seller, investor or renter, researchers from the University of Melbourne have created a system to model and predict house values and rental rates at the individual property level.
The comparison of these two values offers insight into rental yields in the market.
Dr Gideon Aschwanden and Dr Andy Krause from the Melbourne School of Design in the Faculty of Architecture, Building and Planning said rental yields are a critical driver of rental and housing costs and often a key indicator of property bubbles. 
“In this volatile Melbourne property market, buyers want to ensure the safety of their investment. Our recent analysis of property sales and rental returns will better inform investors with location information, helping them to invest their money more securely,” said Dr Aschwanden.
By understanding changes in yields, measures can be taken to help prevent or dampen a sudden collapse in the market, according to the researchers.
Buyers' decisions are driven by costs. With first time homeowners renting out their property to payoff the mortgage to the point where they can afford it they need to estimate their rental income and property yield. 
Using a unique data set of home sales and rentals from the Australian Property Monitors, they investigated the spatial and temporal changes in residential rental yields across the Melbourne metropolitan region from June 2010 to June 2015.
Using data supplied by Domain, they matched properties that have been both sold and rented during the study period.  
After adjusting for market changes, these two observations were compared, to develop a property-specific estimate of rental yield. 
“Starting with the entire metropolitan region, we then calculated yields at the level of local government area (LGA), statistical local area level 1 (SLA1), post code, suburb, and at a property-specific level,” said Dr Aschwanden. 
“Looking at the entire metropolitan region, our rental yield calculations allowed us a direct look at variations by neighborhood, street and even specific building, in the case of apartments,” he said.
The analysis showed that apartments offer higher yields than detached houses. This difference has widened over time, with yields from houses falling off &gt;0.5 percent from June 2013 to June 2015 while yields on apartments have held somewhat steady since 2013.  
“Looking at influencing factors location shows the highest impact. Within the metropolitan area of Melbourne a 6 percent spread of rental yields ranging between 1.5 percent and 7.5 percent is visible. This is much higher than the decline of 0.5 percent observed over the last 3 years or the impact of distance to train stations of 0.5 percent.”
Evidence showing variation within postcodes would help investors reach a decision on whether to purchase a property, they said. Changes within and between localities may also have a big impact on returns than changes over time.
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jonathanchancellor-7SQnKwU6yx

Falling Melbourne rental yields suggest caution, reveals research model

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Rents across the combined capital cities have had the weakest annual change on record with rental yields hitting record low levels, according to CoreLogic RP Data's April Rental Index.
April gross rental yields for houses are 3.3 percent and 4.2 percent for units and a year ago were 2.6 percent and 4.5 percent respectively.
According to the report the expectation is falls will continue with means that capital growth becoming a more important factor for property investors than rental returns.
<a href="/images/2016/05/12/Screen%20Shot%202016-05-12%20at%2012.35.29%20PM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/05/12/Screen%20Shot%202016-05-12%20at%2012.35.29%20PM.png" alt="" width="855" height="695">
"Rental yields are lowest for houses in Melbourne (2.9%) and highest in Hobart (5.3%). Unit yields are lowest in Sydney and Melbourne at 4.0% and highest in Brisbane and Hobart at 5.3%. House and unit yields are at record lows in both Sydney and Melbourne," the report said.
"The low yield profile across Australia’s two largest cities, which are also the cities that attract the largest investment demand, suggests that most recent investors, despite the low mortgage rate settings, are likely to be utilising a negative gearing strategy to offset their cash flow losses against their taxable income. 
"Across every capital city except Hobart, where they are 10 basis points higher, house rental yields are lower now than they were at the same time last year. This is reflective of the fact that rental rates for houses are falling while values have continued to rise. 
"The unit market shows similar trends to the detached housing market. Yields are unchanged over the year in Hobart and Canberra and lower over all other capital cities. The generally softer yields point to market conditions in which unit value growth has generally outpaced unit rental growth."
<a href="/images/2016/05/12/Screen%20Shot%202016-05-12%20at%2012.44.37%20PM.png" target="_blank">Click to enlarge </a>
<img src="/images/2016/05/12/Screen%20Shot%202016-05-12%20at%2012.44.37%20PM.png" alt="">
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mick.cee-iDmgDDAmu8

Weakest annual rental change on record: CoreLogic RP Data

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The Investar website has identified five localities around Australia where rental yields sit at nine percent or higher.
But would you invest in any of them?
 
Rank Suburb State Postcode Dwelling Type Bedrooms Median Listing Price Weekly Median Rent Rental Yield
1 BROKEN HILL NSW 2880 House 2 $99,500 $200 10.45%
2 MANOORA QLD 4870 Unit Studio &amp; 1 $95,000 $190 10.40%
3 ZEEHAN TAS 7469 House 3 $79,000 $150 9.87%
4 PALM COVE QLD 4879 Unit Studio &amp; 1 $175,000 $310 9.21%
5 WOREE QLD 4868 Unit 2 $160,000 $280 9.10%
 
{mijopolls 135}
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Australia's top five rental yield locations: property investor poll

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The far north-eastern New South Wales suburb of Murwillumbah offers rental yields of 8.96 percent for its 2 bedroom units, the best return in the country for apartments.
The median listing price for the 2 bedroom apartments is $145,000, which have a median weekly rent of $250, according to Investar's Top 50 suburbs report.
Murwillumbah is the only suburb in New South Wales in the top 20 across Australia for units and houses.
 
 
{mijopolls 134}
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j.ballantyne1990-6AQqhLzZaK

Murwillumbah boasts New South Wales highest yielding units

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Rental yields on houses in Australia's two biggest cities of Sydney and Melbourne are down to record low levels, increasing the risks for property investors and ultimately, residential mortgage-backed securities (RMBS), according to new report by Moody's Investors Service.
Low rental yields have increased net costs in servicing a housing investment relative to incomes, making investment properties less affordable, says Moody's in its just-released report on Australian RMBS titled, Record Low Rental Yields Increase Risks for Residential Property Investors. 
Net costs refer to investment loans costs less rental income.
Nearly half of the investor loan mortgages backing Australian RMBS were originated in Sydney and Melbourne. Housing investment loans account for 32% of the mortgages backing Australian RMBS. 
"Deteriorating affordability increases the risks for Australian residential property investors and therefore for residential mortgage-backed securities backed by loans on investment properties," said JP Truijens, assistant vice-president at Moody's.
"The deteriorating affordability of servicing investment properties makes residential property investors more vulnerable to risks such as loss of income, interest rate increases, vacancies or rent reductions, and therefore increases their probability of default." 
According to the report, deteriorating affordability also reduces investors' flexibility around refinancing or restructuring their mortgage loan terms, giving them less options should they experience hardship.
On average, the net annual cost of servicing an investment in a median-priced three-bedroom house in Sydney funded with an 80% loan- to-value (LTV) mortgage was $41,300 as of 31 December 2015, up 78% from three years earlier. In Melbourne, the cost was $26,674, up 63% from three years earlier.
Investors in Sydney houses require 39.6% of net household income to service their investment properties, while Melbourne house investors require 26.5%, both record highs. 
For investments in median-priced two bedroom apartments in Sydney, the average net annual servicing cost was $16,270 as of end-2015, up 70% from three years earlier. In Melbourne, the cost was $15,147, up 35% from three years earlier. 4
Investors in Sydney apartments require 16.7% of net household income to service their property investments - the highest in a decade - while Melbourne apartment investors require 15.5%, a record high. 
<a href="/images/2016/04/Screen%20Shot%202016-04-11%20at%208.09.44%20PM.png" target="_blank">Click to enlarge</a>
<div title="Page 2">
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<img src="/images/2016/04/Screen%20Shot%202016-04-11%20at%208.09.44%20PM.png" alt="">
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<a href="/images/2016/04/11/Screen%20Shot%202016-04-11%20at%208.11.59%20PM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/04/11/Screen%20Shot%202016-04-11%20at%208.11.59%20PM.png" alt="">
The fall in rental yields has increased the level of 'cashflow' losses suffered by residential property investors over the past three years and made them dependent on greater levels of house price appreciation to cover their losses.
</div>
A greater dependency on price appreciation makes residential property investing, and in turn, investment loans more risky.
Moody's says the performance of residential property investment loans will deteriorate through 2016 and 2017. Investment loans taken in 2014 and 2015 - at the peak of the recent house price cycle - will be behind this deterioration, it adds.
The credit rating agency also does not expect any major improvement in the cost of servicing property investment loans in the near term.
The negative impact of low rental yields and the deteriorating affordability of servicing property investments will be most evident in RMBS issued in 2016 and 2017.
Australian RMBS portfolios are typically made up of loans that are one to two years seasoned and so the bulk of the 2014 and 2015 investor loans to be securitised will be found in 2016 and 2017 vintage RMBS.
 
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prateek24-ezbwHMbNAk

Record-low rental yields in Sydney, Melbourne increase default risk for investors: Moody's report

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The far north Queensland suburb of Woree on the outskirts of Cairns is the highest yielding suburb for units in Australia to November 2015, according to Property Value.
Four other Cairns suburbs, Bungalow, Manundah, Westcourt and Manoora feature on the top ten list below.
Top 10 highest yielding suburbs for units in Australia
Woree, Cairns, QLD
AVM Rental Yield: 8.5% 
Property Observer went looking for recent unit rentals in Woree and came up with these:
1. A two-bedroom unit at <a href="https://realestateview.com.au/rental-properties/112-windarra-street-woree-qld/property-details-rent-residential-9958935" target="_blank">3/112 Windarra Street</a> (below) is up for rent at $210 per week. 
<img src="/images/2016/02/19/Screen%20Shot%202016-02-19%20at%208.17.30%20AM.png" alt="" width="817" height="470">
2. A two-bedroom unit at <a href="https://www.realestate.com.au/property-apartment-qld-woree-417795458" target="_blank">4/35 Sondrio Close</a> (below) has been listed for $180 pw.
<img src="/images/2016/02/19/woree1.jpg" alt="">
Bungalow, Cairns, QLD
AVM Rental Yield: 8.5% 
Manunda, Cairns, QLD
AVM Rental Yield: 8.4%
Westcourt, Cairns, QLD
AVM Rental Yield: 8.1% 
Risdon Park, Port Pirie City and Dists, SA
AVM Rental Yield: 8.0% 
Elizabeth Downs, Playford, SA
AVM Rental Yield: 7.9% 
Edge Hill, Cairns, QLD
AVM Rental Yield: 7.9% 
Elizabeth Grove, Playford, SA
AVM Rental Yield: 7.8% 
Davoren Park, Playford, SA
AVM Rental Yield: 7.8%
Manoora, Cairns, QLD
AVM Rental Yield: 7.8% 
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Woree, the Queensland location that tops the 10 highest yielding suburbs for units

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Invested in residential property, but a little frustrated with a 'steady' 3-4 percent return?
It might be time to consider the time-tested strategy of diversifying your portfolio and invest in commercial property.
As the heat comes out of the housing market, particularly in Sydney and Melbourne, and expectations of continued softness in the January Core Logic RP Data home price indexes, investors could make a beeline for commercial property.
The search for better yields by investors could benefit commercial property and infrastructure, says AMP Capital chief economist Shane Oliver in its latest weekly update.
Reinforcing the view is the outlook that cash and bank deposits are likely to provide poor returns, with term deposit rates running around 2.5% and the central bank expected to cut the cash rate to 1.75%.
Raine &amp; Horne Commercial’s executive chairman Angus Raine noted late last year that, “low cash rates were helping the smart money find its way into commercial real estate”.
A Commonwealth Bank report said late last year that Australian commercial property sales was set to break the $20 billion benchmark for a third year in a row.
Here are a few reasons why it might be more bang for your buck.
First and foremost, the prospect of higher returns.
Capital city rental rates recorded their slowest annual rate of growth (0.3%) in the 12 months to November, latest Corelogic RP data shows. Growth rental yields also fell to 3.5%, the data showed.
For commercial property, 8% to 12% gross rental yields are not uncommon, according to a blog post on www.realestate.com.au.
Commercial property also offers more options such as office space, industrial, retail, hotels, rural and agribusiness, healthcare and retirement living, meaning it can fit in with most investor needs and risk appetites.
Commercial properties also score on tenancy periods, with contracts typically between three to 10 years, translating to a stable income stream and also less risk of defaulting tenants. For residential property, a lease agreement could be as short as six months and if not renewed, it means the search for new tenants again.
Also, commercial tenants usually pay all the outgoings for you, unlike a residential property, where the landlord is liable for paying council and water rates, maintenance etc.
Square metre for square metre, commercial real estate is often cheaper than residential property but because you’re buying more square metres per property, commercial is usually dearer in real terms. 
On the flip side, vacancy rates are generally higher for commercial, sometimes months or years before a retail space or office is taken up by tenants unlike a house or unit, which typically rent out within weeks. 
Economic fluctuations also impact commercial properties more as businesses rise and fall, hurting demand.
As with any investing, buying commercial property calls for thorough research, best summed up by hotspotting.com.au founder Terry Ryder. 
"Research is the foundation of all successful investment strategies. It takes time and if you don’t have the time, you need to be willing to spend money buying good research."
“We’re seeing plenty of activity in industrial and retail markets priced below $5 million, with assets priced between $1 million and $3 million very popular with yield hungry, self-managed super funds,” said Angus Raine, executive chairman, Raine &amp; Horne Commercial said recently.
“Low cash rates are also helping the smart money find its way into commercial real estate, which is producing some good sales results for vendors.”
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Commercial Property 101: Not happy with residential property returns? Try commercial property 

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GUEST OBSERVER
I was recently reading the latest Residex Best Rent Report, which was released a couple of weeks ago.
There are some notable suburbs in the report showing amazing yields – in fact one suburb in South Australia has a rental yield of over 7% – but the predicted capital growth is not that hot.
That got me thinking… I am often asked what is more important – cash flow or capital growth?
Capital growth versus cash flow has been a hotly contested topic in property investing since the year dot and most people stand firmly in one camp or the other. On the other hand, I have always considered that both are important. After all, if I can achieve both then this allows me to build a portfolio without having large out of pocket expenses each month.
I also believe there is a third way of making even more money.
The Trid3nt Strategy® allows you to make money in three ways; it’s like having a Plan A, B and C.
<ol>
<li>
Buy below market value. In a fast moving market this can be difficult, however the principle is that by doing your research you can identify opportunities and negotiate to create equity from the start.
</li>
<li>
Buy a property with renovation potential. This allows you improve the property so you have the potential to increase the property’s value and rent.
</li>
<li>
Buy in an area with good capital growth potential. As an area grows, you will get equity in your home and your property will be worth more when it comes time to sell.
</li>
</ol>
 
As you can see, with this approach, rental yield alone is not everything. To be clear, you will not make money from a property based on a 5% to 6% rental yield unless you also have capital growth working for you. This is mainly because the cost of holding a property can quickly gobble up your income.
Costs include interest on your loan, council rates, strata fees, utilities, insurance and property management fees, just to name a few. A strong rental yield is important as it will minimise the amount of money you need to contribute out of your own pocket to cover these costs, hence why it is wise to target a high yielding area that also has good growth predictions.
Although there were many suburbs that interested me in the Residex Best Rent Report, there was one suburb that really stood out for me – Wallsend.
Wallsend is located in the western region of Newcastle (NSW), just 11 km from the city centre. The median house value is an affordable $413,500 with a rental yield of 5.04%. The suburb as a whole is also forecast to grow by an average of 6% per year over the next eight years, meaning it could be worth over $700,000 in eight years’ time. With fixed home loan rates below 4.8% at the moment, the median property in this suburb would not cost much to hold, particularly if you are able to make the most of negative gearing.
What really excited me about Wallsend was the Residex Renovators Report. There are over 95 streets in Wallsend that have renovation potential, where you could make over $50,000 by spending just 10% of the property’s value – generating a 20% profit. What’s more, of the 95 streets, 82 streets had the potential to make over $100,000 from a simple cosmetic renovation.
Before jumping into an investment purchase, it’s important to make sure you can easily rent out your property. There’s two parts to this – rental demand and vacancy rates. In the case of Wallsend, over 29% of the suburb’s population are renters and the vacancy rate is a low 2.6%, so both of these metrics check out.
This may not be the first time you’ve heard of Wallsend in recent weeks. If you have been following the news, you may have heard about the ‘big wet’ in NSW, and subsequently that Wallsend has been hit by floods. This brings me to an important point.
Numbers in isolation only tell part of the story. You need to use reports and predictions in combination with other data to conduct a thorough assessment. I believe as a final part of your research it is extremely valuable to actually hit the streets of the given area you are considering. Get a feel for the area, speak to local real estate agents, business owners, councils and residents to find out what is happening with the economy and if there are any plans for development in the area.
Natural disasters may be unavoidable, but knowing that they can happen and understanding the particular areas that are prone to natural disasters – in this instance flooding – should be part of your analysis.
The recent floods in Wallsend should not discourage you. After all, property is a long term investment. This current situation should remind us that there are always other risks to consider when conducting your research. When looking at a specific property it may pay to speak to insurers to make sure you can get appropriate insurance cover at a reasonable cost.
So, going back to the original question – What is more important yield or growth?
As you can see, rental yield is definitely something that should be considered but it is not everything. Capital growth is also important as it will allow you to sell at a profit. Combining this with renovation you also have the ability to push up the rent in the short term and hence reduce your out of pocket expenses, but the numbers alone are sometimes not enough (as recent events have shown).
The fundamentals, though, ring true. If you buy the right property in the right area and add value through renovation and capital growth, there is even the possibility of creating enough equity to buy another property and replicate your success.
Jane Slack-Smith is founder of Your Property Success and Director of Investors Choice Mortgages and can be contacted <a href="https://yourpropertysuccess.com.au/?Cid=Blog-JSS-Jan16" target="_blank">here</a>.
This article first appeared on <a href="https://www.onthehouse.com.au" target="_blank">Onthehouse.com.au</a>.
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Renovation and capital growth: Jane Slack-Smith

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2015 was a lacklustre year for rental growth in Australia with rents increasing by just 0.3% in 2015; not exactly the news investors are looking to read about but good news for those looking to rent.
We’ve never seen rental growth as sluggish as it is at the moment. Furthermore, we’re expecting to see more of the same over the coming months due to increases in the supply of new housing, rental stock and a further slowdown in migration rates. 
The only cities to see an increase in weekly rental rates were Sydney with an increase of 1.9 percent, Melbourne (2.2 percent), Hobart (0.6 percent) and Canberra (1.9 percent) while rates fell in Brisbane by (-0.3 percent), Adelaide (-0.2 percent), Perth (-8.0 percent) and Darwin (-13.3 percent).  
A comparison between December 2015 and December 2014 shows in 2014 annual rental growth was slowing but was tracking at a much higher 1.8% which highlights just how much the rental market eased throughout 2015. 
<a href="/images/2016/01/12/Screen%20Shot%202016-01-12%20at%209.21.53%20AM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/01/12/Screen%20Shot%202016-01-12%20at%209.21.53%20AM.png" alt="">
The construction boom across the capital cities, coupled with slowing population growth, low mortgage rates and the recent heightened level of activity from investors are the major contributing factors to the slowing rental growth in 2015.
Although Sydney and Melbourne saw the largest ramp up in new housing supply, both cities still recorded rental increases over the year, although rental growth is slowing relative to 12 months earlier.
It is clear that the increase in investment stock continues to provide landlords with little scope to lift rental rates while the low mortgage rate environment provides little incentive to push yields higher.
We envisage that growth in rental rates is likely to remain weak or potentially slow even further over the coming months. The good news for those looking to rent is the possibility that rental rates will fall even further over the coming year.
While the news for renters will be welcomed, investors may be facing weaker capital gains coupled with little in the way of rental growth or yield.
The large pipeline of residential construction activity and recent high levels of investment demand means that renters are likely to continue to have plenty of choice.
<a href="/images/2016/01/12/Screen%20Shot%202016-01-12%20at%209.15.47%20AM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/01/12/Screen%20Shot%202016-01-12%20at%209.15.47%20AM.png" alt="">
 
Cameron Kusher is research analyst for CoreLogic RP Data. You can contact him <a href="https://blog.corelogic.com.au/about/" target="_blank">here</a>.
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Annual national rental growth lowest on record for landlords: Cameron Kusher

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The days of double-digit rental yields in Australia are gone. And it’s hard to see those times returning any day soon.
Up until about three years ago, Australians who were comfortable with risk, or perhaps oblivious to it, were buying in mining towns and resources-related regional centres, and commonly achieving initial gross rental returns of 10%, sometimes more.
But the same places are now likely to offer little better than 5%. Even though prices have fallen a lot in devastated mining centres, rents have fallen even more. Median rental yields, according to Domain, are now 4.8% in Newman, 5.8% in Port Hedland, 4.3% in Emerald and 3.1% in Moranbah. 
So where do you turn, now, for a better-than-average rental yield?
The best on offer that I can find are in Cairns in North Queensland. The median rental yields for apartments are generally 7% and above, more because prices tend to be low rather than because rents are high.
According to Domain figures, the median return for Cairns North, where over 200 apartments have sold in the past 12 months at a median price of $237,000, is 7.5%.
In downmarket Manoora, where 90 units have sold at a median price of $167,000, the median rental yield is 7.9%. And in Woree (median price $148,000), the median rental yield is 8.0%. That means a small unit selling for $150,000 and renting for $230 a week.
Houses around Cairns generally provide rental yields in the 5.5% to 6.0% range. 
It’s worth considering because Cairns presents a solid market at the moment - boosted by an improving economy, strong tourism and major spending on infrastructure. Some suburbs have recorded double-digit growth in median prices in the past 12 months.
The bottom line is that those Cairns yields are as you good as you will realistically find across Australia. There is nowhere I know about that offers double-digit yields anymore. And I mean genuine rental returns, not computer-generated statistical glitches.
If you read enough newspapers, magazines and online news services, you’re going to see lots of lists claiming that returns well above 10%, sometimes above 20%, are available.
Don’t believe these stories. They are statistical aberrations and credible median organisations wouldn’t publish them.
One of these lists published recently claimed there’s a place in Queensland where you can get rental yields of - wait for it - 58%. That’s so obviously absurd that it's amazing anyone published it, but print it they did.
Just pause for a moment and consider what’s being suggested here. A rental yield of 58%, apart from being an obvious error, means a property selling for $300,000 would fetch rent of $174,000 a year or $3,346 per week.
When I first saw it in an online real estate magazine, I thought it might be a typographical error. 
But no, I clicked on the town credited with this remarkable real estate achievement and there, sure enough, was a presentation of figures which showed how they arrived at this.
The town credited with a 58% median rental yield was Beaudesert, south of Brisbane and west of the Gold Coast.
Apparently, you can buy units in Beaudesert for $22,500. Yes, apartments for less than the price of a Jeep. And given that the median weekly rent for these remarkably cheap dwellings is $253 per week, rental yields are indeed 58.47% - according to the computer, at least, proving once again the validity of the old adage about “garbage in, garbage out”. 
Obviously someone has made a mistake. You can’t buy units for $22,500 in Beaudesert - or anywhere else in Australia. And, equally obviously, typical yields in the town are not 58.47%. 
But wouldn’t you think someone would take steps to correct these startling errors? Because they’re common. Mistakes of this kind are appearing weekly, if not daily, in real estate media.
In October I wrote about claims from the same source that you could commonly achieve 30% yields in Mission Beach – and other instances where it has been claimed that prices in tiny towns have risen 40-50% in 12 months.
The latest presentation of the top five locations in each state with the highest yields was a litany of these types of mistakes. It’s claimed there’s a location in NSW where typical yields are 28%, a tiny town in South Australia where you can commonly achieve 16% and a coastal hamlet in Tasmania where 15% returns are common. 
Many of the locations listed as having outstanding rental yields are basket-case markets with vacancies above 20%.
Others are coastal towns where high rents are achieved in peak holiday times and the computer assumes those peak rents are achieved 52 weeks of the year (when, in reality, the properties are vacant for much of the year), hence the ridiculously high yield figure.
If you choose to believe these figures, you’ll welcome to head off to Beaudesert, Mission Beach or wherever and see if you can find a property where the rental yield is even as high as 6%.
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>
 
For your free Property Observer eBook from RAMS, 12 tips for first-time buyers, covering everything you need to know when it comes to purchasing property, click here.
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