<p><a href="https://www.apartments.com.au/developers/consolidated-properties">Consolidated Properties Group</a> (CPG) is approaching the launch of its latest Brisbane riverfront development, Castile, on the dress circle Skyring Terrace in Newstead.</p>

<p>VIP buyers are now being engaged, with a full public sales launch coming later this year.</p>

<p>Positioned as the final opportunity to secure a new absolute riverfront residence on the East bank of Newstead, Teneriffe or New Farm, Castile at 47 Skyring Terrace has been designed by <a href="https://www.apartments.com.au/architects/woods-bagot">Woods Bagot</a> as a timeless addition to the Brisbane skyline.&nbsp;</p>

<p>[smartcode_project:default project_id=150489 project_image_fid=371113]</p>

<p>The name Castile draws on themes of permanence, sophistication and legacy, reflecting a broader vision centred on enduring architecture and timelessness in the rarest of riverfront positions.&nbsp;</p>

<p>CPG Chairman and CEO Don O’Rorke said the project had been envisioned as a future Brisbane icon.&nbsp;</p>

<p>“With 47 metres of direct river frontage and never to be built out views, 47 Skyring Terrace is the definitive address on the Brisbane River,” O’Rorke said.&nbsp;</p>

<p>[smartcode_project:default project_id=150489 project_image_fid=371114]</p>

<p>“Rather than following trend-based apartment design, Castile draws inspiration from Brisbane’s great heritage buildings, reinterpreting classical architecture into a contemporary riverfront landmark designed to stand proudly for the next 100 years,” he said.&nbsp;</p>

<p>The approved development will comprise 227 apartments across a 25-storey tower alongside a boutique six-storey riverfront building of just 12 residences.&nbsp;</p>

<p>Construction is scheduled to commence in September 2026.</p>

<p>[smartcode_project_cta:default project_id=150489]</p>


Joel Robinson

CPG unveils Castile Newstead ahead of upcoming sales launch

<p>Australia’s online shopping habits have shifted dramatically over the last decade. As eCommerce volumes surged, so too did the frustrations that came with traditional parcel delivery: missed deliveries, long Post Office queues, parcel theft and the challenge of being home during business hours.</p>

<p>Australia Post’s Parcel Lockers emerged as one of the more practical responses to that changing consumer behaviour.</p>

<p>What started as a relatively niche delivery option has evolved into a nationwide network of more than 1,400 self-service Parcel Lockers positioned at train stations, shopping centres, supermarkets and Post Offices across the country. The system allows Australians to send, collect and return parcels 24 hours a day, fundamentally changing how many people interact with deliveries.</p>

<p>The appeal is relatively straightforward: flexibility.</p>

<p>Instead of waiting at home for a delivery driver or rushing to a Post Office before closing time, users can direct eligible parcels to a Parcel Locker location of their choice. Once the parcel arrives, Australia Post sends a notification with a collection code or QR access through the AusPost app, allowing customers to retrieve their package at any time within the collection window.</p>

<p>For apartment residents in particular, the system has become increasingly valuable.</p>

<p>Higher-density living has created logistical challenges around deliveries, especially in buildings without concierge services or secure parcel rooms. Missed deliveries are common, while parcel theft has become an increasing concern as online shopping volumes continue to rise.</p>

<p>Australia Post itself has repeatedly highlighted the growing issue of “porch pirates” during peak shopping periods, encouraging customers to use Parcel Lockers as a safer alternative to unattended home deliveries.</p>

<p>That security aspect is one of the key reasons the Australia Post Parcel Locker network has grown so rapidly.</p>

<p>Parcel Lockers are positioned as secure, monitored collection points that reduce the risk of theft while also improving delivery efficiency for Australia Post. Instead of multiple redelivery attempts, parcels can be consolidated into a single secure destination.</p>

<p>The Parcel Lockers themselves are free to use through a MyPost account and support a range of parcel sizes up to 16 kilograms and dimensions of approximately 35 x 44 x 61 centimetres.</p>

<p>Beyond receiving parcels, the system has increasingly become integrated into the broader eCommerce ecosystem.</p>

<p>Customers can now use Parcel Lockers to return online purchases, while retailers have embraced the model as a way to improve delivery success rates and reduce friction in the shopping process. Australia Post has actively expanded partnerships with major retailers and promoted Parcel Lockers as part of a broader out-of-home strategy.</p>

<p>The timing of that expansion aligns with broader changes in Australian shopping behaviour.</p>

<p>The acceleration of online retail during and after the pandemic placed enormous pressure on delivery infrastructure. Parcel volumes reached record highs, particularly during Black Friday and Christmas periods, with Australia Post delivering more than 100 million parcels during peak festive seasons.</p>

<p>That growth forced logistics providers to rethink the “last mile” of delivery, widely regarded as the most expensive and operationally difficult stage of the process.</p>

<p>Parcel Locker systems have increasingly been viewed as part of the long-term solution.</p>

<p>The concept itself is not unique to Australia. Parcel Locker networks have become common globally, particularly across Europe and Asia, where dense urban environments and apartment living create similar logistical challenges. But Australia’s geography and suburban sprawl made adoption slower initially.</p>

<p>Now, however, the convenience factor is driving mainstream usage.</p>

<p>For commuters, Parcel Lockers near train stations allow parcels to be collected on the way home from work. For apartment dwellers, they remove the uncertainty around access and missed deliveries.</p>

<p>The rise of the AusPost app has also streamlined the experience, centralising notifications, tracking and Parcel Locker access into a single platform. Australia Post has increasingly pushed customers toward app-based delivery management, partly as a way to combat phishing scams and fake delivery notifications, which have become more sophisticated in recent years.</p>

<p>The Parcel Locker model is also beginning to influence property development itself.</p>

<p>Parcel management has become a growing consideration in apartment building design, particularly as online shopping becomes embedded in everyday life. Many new residential developments are now incorporating dedicated parcel rooms or Parcel Locker systems into foyers and communal spaces.</p>

<p>For developers, parcel management is increasingly viewed as part of the broader resident amenity offering, alongside gyms, wellness spaces and communal work areas.</p>

<p>That reflects a wider evolution in how residential buildings are designed.</p>

<p>Apartment buyers are placing greater emphasis on convenience, security and operational functionality, particularly in higher-density urban environments. Parcel delivery, once considered a minor operational detail, has become an increasingly important part of that equation.</p>

<p>Australia Post’s Parcel Locker network sits at the centre of that behavioural shift.</p>

<p>What began as a simple alternative delivery option has evolved into a key piece of infrastructure supporting Australia’s growing eCommerce economy and changing urban lifestyles.</p>

<p>And as online shopping continues to expand, the role of Parcel Lockers is likely to become even more embedded in how Australians live, shop and receive goods.</p>


How Australia Post Parcel Lockers changed parcel delivery convenience in Australia

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


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

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


Sammut secures approval for debut Brisbane apartment development in Toowong

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


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

Residential Construction

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<div>The latest Consumer Prices Index revealed some interesting trends in rental growth to December 2015.</div>
<div> </div>
<div>At the national level rental growth of just +1.2 percent is the slowest we have seen since 1995, which makes a good deal of sense given the great surge in the number of investors and the construction response to rising dwelling prices. </div>
<div> </div>
<div>Essentially this is the opposite of what happened in 1985 when investors exited the market following restrictive changes to tax legislation.</div>
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<div><a href="/images/2016/01/29/B1.jpg" target="_blank">Click to enlarge</a></div>
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<div><span style="text-decoration: underline;"><strong>City by city</strong></span></div>
<div> </div>
<div>In most quality locations, rental growth is simply following the cycle, slowing in response to a surge in both construction and the number of investor-owned dwellings.</div>
<div> </div>
<div>Annual rental growth remains positive in Sydney (+2.3 per cent), Melbourne (+1.7 per cent), Brisbane (+1.0 per cent), Adelaide (+1.2 per cent), and Hobart (+1.1 per cent).</div>
<div> </div>
<div>It is a truism to say that there are diverging trends within those markets, particularly noteworthy being slowing rents in high density and high rise apartment complexes.  </div>
<div> </div>
<div>Rental growth has turned negative in Perth and Darwin, following an enormous surge through the mining boom, while Canberra has actually recorded moderately negative rents for the past three years.</div>
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<div><a href="/images/2016/01/29/B2.jpg" target="_blank">Click to enlarge</a></div>
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<div><strong><span style="text-decoration: underline;">Long run trends</span></strong></div>
<div> </div>
<div>It pays to be wary about analysis calling "plummeting" rental growth, but it is true that the rental market will generally need to slow in order that the high levels of investor stock can be absorbed. </div>
<div> </div>
<div>Eventually stronger rental price growth will return, but only once investor finance has pulled back, and the cycle does take time to work through. </div>
<div> </div>
<div>The long run data shows the cyclical nature of rental growth by capital city. </div>
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<div><a href="/images/2016/01/29/B3.jpg" target="_blank">Click to enlarge</a></div>
<div><img src="/images/2016/01/29/B3.jpg" alt=""></div>
<div> </div>
<div><span>Looking at rental growth by year it is clear that while rental price growth been strongest in Sydney over the past five years, over the past decade the resources states have seen the greatest increase in the cost of renting, some of which is now unwinding.</span></div>
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<div><a href="/images/2016/01/29/C4.jpg" target="_blank"><span>Click to enlarge</span></a></div>
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<p><span><em>PETE WARGENT is the co-founder of <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blogger</a>.</em><br></span></p>
<p><em>His latest book is <a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank" rel="nofollow">Four Green Houses and a Red Hotel</a>.</em></p>
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pwargent-M4siyDbqQY

National rental growth slowest since 1995: Pete Wargent

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<p>The Australian Bureau of Statistics released construction work done data for the March 2016 quarter last week. </p>
<p>The data set looks at the value of construction work completed over the quarter and is an input to the national accounts (GDP) data.</p>
<p><a href="/images/2016/06/06/Chart-1-3-580x210.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/06/06/Chart-1-3-580x210.jpg" alt=""></p>
<p>Over the quarter, the value of construction work done was $47.928 billion which was down -5.5 percent over the quarter and -7.2 percent year-on-year.  In fact, the value of construction work done over the March 2016 quarter was the lowest since June 2011 and has been trending lower since the December 2012 quarter.</p>
<p><a href="/images/2016/06/06/Chart-2-2-580x208.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/06/06/Chart-2-2-580x208.jpg" alt=""></p>
<p>The decline in the value of work done is largely being driven by engineering construction which was bolstered until recent by the mining investment boom.  Over the quarter there was $24.9 billion worth of building work completed and $23.0 billion in engineering construction completed. </p>
<p>It shows that following a recent boost from infrastructure investment, building construction is now the key driver.  The value of engineering construction work done peaked at $34.7 billion in the September 2012 quarter and has since fallen by -33.6 percent while building activity peaked at $25.2 billion in the December 2015 quarter and has fallen by -1.0%.  With construction work in both the building and engineering sectors falling it is difficult to see how construction work done won’t continue to decline over the coming months.  Even the largest residential housing construction boom on record has not been enough to offset the previous largest engineering construction investment boom on record.</p>
<p><a href="/images/2016/06/06/Chart-3-2-580x210.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/06/06/Chart-3-2-580x210.jpg" alt=""></p>
<p>The building segment of construction work done consists of residential and non-residential construction (offices, retail shops, industrial properties).  The previous data showed building work has started to fall with the fall being driven by non-residential construction.  In fact residential construction work done is continuing to climb and is now at a record high $16.6 billion while non-residential is down -18.6 percent from its June 2010 peak.  While the largest residential construction boom in history continues to drive activity in that sector higher, it isn’t enough to offset the decline in the non-residential (and engineering construction) sector which is well below peak levels of activity.</p>
<p><a href="/images/2016/06/06/Chart-4-1-580x207.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/06/06/Chart-4-1-580x207.jpg" alt=""></p>
<p>The residential construction component is further broken down into three components: houses, other residential (units) and alterations and additions, including conversions. Unit construction work done reached a record high of $6.8 billion on the back of the biggest unit construction boom on record. </p>
<p>While unit construction activity continues to rise, the $7.7 billion in work done for houses is down -7.1 percent from its recent peak in March 2015 at $8.3 billion.  The value of alterations and additions completed was recorded at $2.0 billion over the quarter down -6.9 percent from its $2.1 billion peak over the September 2011 quarter.  It is anticipated work done for houses will continue to trend lower while unit work should trend higher over the next few quarters before starting to fall. </p>
<p>Meanwhile, the direction of alterations and additions is unclear but there could be some scope for an increase over the coming quarters and years given how much equity some home owners have and the costs associated with moving home.</p>
<p>Residential construction has been a large contributor to economic growth over recent years however, it looks as if it is likely to start detracting from growth as construction activity moves through a peak. </p>
<p>Housing construction activity has already been fading for a year while unit activity continues to rise however, we anticipate that it too will turn within the next 12 months. With the resources boom and concurrent infrastructure investment boom so important to Australia’s prosperity coming out of the financial crisis as it faded, building activity became extremely important, particularly residential construction activity. </p>
<p>With the residential construction boom starting to fade we need the next economic driver to rise in order to offset the slowing in building activity. An increase in infrastructure investment would seem to be a prime candidate however, Governments may not be willing to invest the money. The next boom will seemingly need to come from somewhere else; potentially from the education, health and tourism sectors as the lower Australian dollar makes these sectors more globally competitive as well as increased consumption if households start to ease their rate of saving.</p>
<p> </p>
<div class="sharedaddy sd-sharing-enabled">
<em>Cameron Kusher is research analyst for CoreLogic RP Data. You can contact him <a href="https://blog.corelogic.com.au/about/">here</a>.</em> </div>
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The value of construction work done for houses is falling with units likely to follow shortly: Cameron Kusher

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<p>Construction has commenced at QM Properties' luxury riverside project, Anthology New Farm, following $19 million in sales.</p>
<p>It includes the sale of all three penthouses, with the highest priced selling for $1.88 million.  </p>
<p>QM Properties has appointed McNab Constructions to build the Rothelowman designed building.</p>
<p>Located on tree-lined Moray Street, the building is expected to be complete by late 2020.</p>
<p>QM Properties Development Manager Glenn Rix said Anthology, which is six residential levels plus roof top facilities, comprises just 26 residences.</p>
<p>It is the first medium rise project to commence construction in New Farm this year.  </p>
<p><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/10/30/Anthology_Interior_Penthouse_Living_R005.jpg" alt=""></p>
<p>"Anthology has appealed to owner occupiers looking to live in a boutique building in one of the most sought-after suburbs in Brisbane," Rix said.</p>
<p>"To achieve over 60% pre-sales before commencing construction is an excellent result."</p>
<p>Rix said QM has partnered with McNab Constructions because the company has an enviable reputation for delivery of high quality product across multiple market segments. </p>
<p>A mix of three bedroom apartments remain for sale from $1,125,000.</p>
<p><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/10/30/Anthology_pool.jpg" alt=""> </p>
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j.ballantyne1990-6AQqhLzZaK

Anthology New Farm commences construction with $19 million in sales

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<p>EXPERT OBSERVATION</p>
<p>The Australian Bureau of Statistics (ABS) data on residential construction work done has fallen in NSW in the December 2018 quarter.</p>
<p>Residential construction work done in NSW in the December 2018 quarter has fallen by $356,717,000 since the June quarter of 2018.</p>
<p>This represents a 5 per cent fall over 6 months and it looks like the graph is falling more over future quarters as the housing construction market slows down. Many Sydney developers are finding it very difficult to attract pre commitments from investors or owner occupiers for apartments in the current market.</p>
<p>While the drop in residential building construction is modest it needs to be seen against a big drop in approvals for apartments across NSW of 33 per cent over the last year.</p>
<p>The flow on from the banking Royal Commission that has slowed lending is continuing and the negative environment towards new development created by the state election on 23 March is contributing to the slow down.</p>
<p>The falling prices for houses and apartments in Sydney are also leading to purchasers putting off decisions until the market bottoms in the future.</p>
<p>The residential construction sector supports 300,000 jobs in NSW and continuing falling home production will begin to impact on the jobs in this sector.</p>
<p>The non-residential sector which is around a third of the size of the residential sector is more stable with NSW expenditure at $2,524,336,000 and Victoria at $2,349,161,000 trend and seasonally adjusted over the quarter.</p>
<p>On a per capita basis Victoria is spending more on residential construction with $894 per person followed by NSW at $816, Queensland at $578 and Western Australia at $348.</p>
<p>The Urban Taskforce is concerned that residential construction and approvals are now dropping and that whoever is elected to form government in NSW on 23 March will need to reverse these trends to maintain jobs in the industry.</p>
<p>The graphs below are based on the Australian Bureau of Statistics data. </p>
<p><img src="https://www.urban.com.au/images/2019/2/28/CJ%201.JPG" alt=""></p>
<p><img src="https://www.urban.com.au/images/2019/2/28/CJ%202.JPG" alt=""></p>
<p><em>CHRIS JOHNSON is the Urban Taskforce CEO </em></p>
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Residential construction falling in NSW: Chris Johnson

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<p>EXPERT OBSERVATION</p>
<div id="post-body-5825783051489187345" class="post-body entry-content">
<div>The most timely JLL report showed that the residential construction pipeline is now shrinking fast on tighter lending criteria for developers and investors.  </div>
<div> </div>
<div>In time this will inevitably lead to tighter rental vacancies, especially as we head into and beyond the traditionally busy Christmas and New Year period, with more Airbnb offerings also set to eat into the rental market through this cycle. </div>
<div> </div>
<div>With the greatest volume of apartment construction through this cycle Sydney and Melbourne will be the last markets to know about the tightening (although when D-Day does come the presently record high population growth in these cities means that the tightening of rentals market may also be felt most acutely).</div>
<div> </div>
<div>We're already hearing more and more stories of failed or delayed settlements, so the slowing in supply could come about sooner than expected. </div>
<div> </div>
<div>The initial impacts will be felt in Hobart, Canberra, Adelaide, and an array of rental markets around regional Australia.</div>
<div> </div>
<div>Indeed, SQM's latest figures showed that rental vacancies had already fallen to the <a href="http://petewargent.blogspot.com/2018/11/lowest-vacancies-since-early-2014" target="_blank">lowest level since 2014</a> by the end of last month, so the process is well underway.</div>
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<div>The HIA forecast today in its National Outlook that housing starts will fall by more than 50,000 from the peak, noting (or lamenting) that:</div>
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<div>'APRA’s restrictions were designed to curb high risk lending practices but we are now seeing ordinary home buyers experience delays and constraints in accessing finance.'</div>
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<div>Note that all of this is before Labor's proposed changes to negative gearing come about, which were originally designed to slow investor activity in the raging hot markets of 2016. </div>
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<div><strong><span style="text-decoration: underline;">Arrivals hit record high</span></strong></div>
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<div>The ABS released its arrivals and departures figures for the month of September 2018 this morning, which showed permanent and long-term arrivals rising to 823,090 over the year to September. </div>
<div> </div>
<div>This represents an increase of 6 per cent from a year earlier, and is the highest figure on record for Australia (the equivalent figure around the time of the Sydney Olympics was about 300,000, which is a measure of just how popular migration to Australia has become).</div>
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<div>Short-term arrivals into Australia have also boomed in recent years, rising to a record high of 9.2 million in September. </div>
<div>
<br>Interestingly the growth is no longer being driven by Chinese tourists, with a range of other countries picking up the mantle, including India.<br><br><div class="separator"><a href="https://2.bp.blogspot.com/-9e36O96FObc/W_IIPQ4rEKI/AAAAAAAAs8Y/sauXuXL3M88cp9P4W5h8nuuXZV_WA_JCgCLcBGAs/s1600/A2.jpg"><img src="https://2.bp.blogspot.com/-9e36O96FObc/W_IIPQ4rEKI/AAAAAAAAs8Y/sauXuXL3M88cp9P4W5h8nuuXZV_WA_JCgCLcBGAs/s640/A2.jpg" width="640" height="352" data-original-height="799" data-original-width="1447"></a></div>
<br>Education arrivals were also up by 5 per cent from a year earlier to a record high of 596,400.<br><br><div class="separator"><a href="https://2.bp.blogspot.com/-BeHBJ35BtQ0/W_IKs0Qkn9I/AAAAAAAAs8s/XzTDMdxiWHs0kmY8ed9iJjFEdByWn8HGgCLcBGAs/s1600/Education.jpg"><img src="https://2.bp.blogspot.com/-BeHBJ35BtQ0/W_IKs0Qkn9I/AAAAAAAAs8s/XzTDMdxiWHs0kmY8ed9iJjFEdByWn8HGgCLcBGAs/s640/Education.jpg" width="640" height="374" data-original-height="793" data-original-width="1357"></a></div>
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<div>Finally, at the state level short-term arrivals were up by 4 per cent in New South Wales to 3.45 million for the year to September, but growth was stronger in Victoria (up 8 per cent to 2.3 million) and Queensland (up 8 per cent to 2 million).</div>
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<div>
<a href="https://2.bp.blogspot.com/-BQ5Zsf2TBjQ/W_IIrT42XKI/AAAAAAAAs8g/vzjR8vNOBGA1kafBkeVaYabmGUZesD40gCLcBGAs/s1600/A4.jpg"><img src="https://2.bp.blogspot.com/-BQ5Zsf2TBjQ/W_IIrT42XKI/AAAAAAAAs8g/vzjR8vNOBGA1kafBkeVaYabmGUZesD40gCLcBGAs/s640/A4.jpg" width="640" height="358" data-original-height="797" data-original-width="1418"></a><br><br>Queensland was a little flattered here by the <a href="http://petewargent.blogspot.com/2018/04/gc2018hockey" target="_blank">Commonwealth Games XXI</a>, held at Gold Coast earlier this year...although that all seems like a long time ago now!<br><br><strong><span style="text-decoration: underline;">The wrap</span></strong><br><br>Both short- and long-term arrivals hit record highs for the year to September 2018, with accordingly significant implications for housing market demand over the year(s) ahead.<br><br>Australia's visa programme is tilted towards those aged under 30, so there are dramatic implications for rental market demand here as construction slows, as well as pent up demand for entrants to home ownership over the years ahead. </div>
<div> </div>
<div><em>PETE WARGENT is the co-founder of AllenWargent property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank">blogger</a>.</em></div>
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Rental vacancies to tighten: Pete Wargent

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<p class="p1"><span class="s1">Residential construction activity remains buoyant across select parts of Sydney, according to one industry expert, despite media discourse about the property market reaching an unsustainable peak.</span></p>
<p class="p2">Savills Australia’s Johnathon Broome, a <a href="http://www.savills.com.au/services-and-sectors/sales-and-investment/metropolitan-and-regional-sales.aspx" target="_blank"><span class="s2">Residential Site Sales</span></a> executive, maintains that strong demand continues for luxury residential development in suburban hotspots near the CBD. </p>
<p class="p1"><span class="s1">“The inevitable downturn we are currently witnessing is dampening consumer sentiment regarding the residential sector but forward-looking drivers would suggest otherwise,” he said.<span class="Apple-converted-space"> </span></span></p>
<p class="p1"><span class="s1">According to <a href="http://www.savills.com.au/research/australian-research.aspx" target="_blank"><span class="s2">Savills Research</span></a>, Sydney has been the prime beneficiary of the ongoing surge in overseas migration into Australia throughout the past 10 years, boosting the city’s population to 5.1 million people as of August 2018.<span class="Apple-converted-space"> </span></span></p>
<p class="p1"><span class="s1">“New South Wales’ population grew at a rate of 1.4 percent throughout the year to March 2018, with approximately 113,000 people added to the state,” Mr Broome said.</span></p>
<p class="p1"><span class="s1">“The majority of this was due to the ongoing immigration cycle, with more than 85,000 overseas migrants settling in Sydney over the same period – accounting for about 40 percent of all overseas migrants who settled in Australia.”</span></p>
<p class="p1"><span class="s1"><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2018/10/8/2%20Greenwich%20Road%20Greenwich%20-%20CGI%20-%20aerial%20copy.jpg" alt=""><br>CGI of 2 Greenwich Road, Greenwich.</span></p>
<p class="p1"><span class="s1">Mr Broome went on to say that while net interstate migration for the state has been notably negative, resident migration out of Sydney has been concentrated in three Sydney districts – the inner south-west, the eastern suburbs and Parramatta.<span class="Apple-converted-space"> </span></span></p>
<p class="p1"><span class="s1">“Suburbs on the Lower North Shore remain prime destinations for residents and overseas migrants alike, with developments in St Leonards and Crows Nest earmarked for more than 4,600 new dwellings throughout the next five years,” he said.</span></p>
<p class="p1"><span class="s1">“Ongoing changes to residential zonings across North Shore suburbs, which have traditionally had low-density zonings in place, mean that these districts remain on the radar for both developers and residents, keeping population growth forecasts for these areas buoyant.</span></p>
<p class="p1"><span class="s1">“Developers have remained active in these suburbs, particularly showing strong interest in more palatable boutique development sites, which appeal to the still-thriving owner-occupier market.</span></p>
<p class="p1"><span class="s1">“There have been a number of recent off-the-plan sales on the Lower North Shore selling for more than $40,000 per square metre, in addition to the recent sale of a penthouse in Milsons Point for more than $61,000 per square metre.”</span></p>
<p class="p1"><span class="s1">Savills Australia is currently marketing two high-end residential development sites on the Lower North Shore.<span class="Apple-converted-space"> </span></span></p>
<p class="p1"><span class="s1">The first site is located at 2 Greenwich Road, Greenwich, for circa 70 apartments (subject to council approval), with the majority of apartments from the third floor upward positioned to receive Sydney Harbour Bridge views.<span class="Apple-converted-space"> </span></span></p>
<p class="p1"><span class="s1">The second site is located at 26 Ridge Street, North Sydney, a commercial building with the potential to be converted into 10 full or split-level apartments (subject to council approval) with a northerly aspect, and within 300 metres of the new Victoria Cross metro station.</span></p>
<p class="p1"><span class="s1"><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2018/10/8/26%20Ridge%20Street%20North%20Sydney%20-%20CGI%20-%20ground%20copy.jpg" alt=""><br>CGI of 26 Ridge Street, North Sydney.</span></p>
<p class="p1"><span class="s1">Mr Broome said North Sydney and its surrounding suburbs were “set to become even more attractive to residents, investors and retailers”, as the multi-billion-dollar construction investment into infrastructure spending on roads and transport hubs increased the precinct’s connectivity to the rest of the city.<span class="Apple-converted-space"> </span></span></p>
<p class="p1"><span class="s1">“We have already seen a wave of residential developments in the area inject life into the CBD’s forgotten sibling, with the Ward Street redevelopment plan set to revitalise the suburb’s 100,000sq m retail precinct,” he said.</span></p>
<p class="p1"><span class="s1">In the five-year period to 2016, Savills research shows that the population in the Greenwich and North Sydney areas grew by 10 percent and 12 percent respectively, notably more than the growth rate for Greater Sydney.<span class="Apple-converted-space"> </span></span></p>
<p class="p1"><span class="s1">“Willoughby and North Sydney councils are positioned to maintain their strong population growth figures over the coming years, and the savvy developers looking to purchase in this market will continue to do well,” Mr Broome said.</span></p>
<p class="p1"><span class="s1">“These areas have always attracted younger, more educated, professional workers with median single and family incomes significantly above Sydney’s and the nation’s averages, which has meant that the demand for property has far outstripped supply and will continue to do so in the years to come.”</span></p>
<p class="p4"><span class="s1"><em>Savills is a leading global real estate service provider offering the full spectrum of services from strategic advice to managing assets and projects and transacting deals. Johnathon Broome is an Executive in Savills Residential Sites Sales. To learn more about Savills, visit </em><a href="http://www.savills.com.au/" target="_blank"><span class="s2"><em>savills.com.au</em></span></a><em>.</em></span></p>
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jrobinson-rf4aSBido9

Residential construction activity remains buoyant in Sydney

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<p>Construction activity saw a rebound in the value of new residential development applications captured over February, according to CoreLogic.</p>
<p>The combined value of development proposals for February was $12.6 billion; almost half of which was residential.</p>
<p>Residential application values over February totalled $6.1 billion, which represents a 64% month on month increase.</p>
<p>For new residential projects captured by CoreLogic, New South Wales saw a $3.5 billion application, entailing works for the Wilton North Precinct (above).</p>
<p>The project encompasses the construction of 5,500 homes, with 5,000 square metres of retail, as well as playing fields, open space, local centres and schools. The project is being led by Bradcorp Holdings Pty Ltd.</p>
<p>CoreLogic commercial research analyst Eliza Owen said new deals have developers seeing long term growth in Sydney's housing market.</p>
<p>"The high value, large scale residential development applications are surprising, given our indices data is indicating a decline in Sydney dwelling values over the year," she said.</p>
<p>“Clearly, the Western Sydney City Deal and the vision from the Greater Sydney Commission has developers anticipating long term growth in Sydney’s housing market.”</p>
<p><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2018/3/13/VALUE.jpg" alt=""></p>
<p>The Wilton North Precinct proposal is within the Wollondilly Shire Council, which in turn is in ‘The Western Parkland City’, as outlined by the Greater Sydney Commission.</p>
<p>Earlier this month Malcom Turnbull launched the Western Sydney City Deal with council leaders, and NSW state premier Gladys Berejiklian.</p>
<p>City Deals are an initiative for all levels of government, the private sector and the community to work together, to create large scale construction projects and economic reform.</p>
<p>Among the various employment initiatives outlined for Western Sydney in the City Deals agreement, a ‘North-South’ rail link was announced, which would link south-west Sydney with St Marys station, via the future Badgery’s Creek Airport.The project currently has an approximate construction value estimate of $20 billion.</p>
<p>The application for over 5,000 new dwellings in Sydney coincides with the first annual decline in the Sydney CoreLogic Hedonic Home Value Index since August 2012.</p>
<p>In the 12 months to February, the index declined 0.5%, indicating values across the city are starting to fall. However, the plans being laid out for Greater Sydney may be prompting counter-cyclical behaviour among developers, who are betting on long-term growth in the metropolitan area.</p>
<p>CoreLogic commercial research analyst Eliza Owen noted the overall construction value of new project was below the five year.</p>
<p>“Despite the bullish residential development applications in Sydney, the combined construction value of all new projects captured over February is below the five year average of $13.6 billion per month, and was also substantially lower than the $18 billion recorded in January.” </p>
<p>While development applications were slightly subdued in February, CoreLogic captured 713 projects moving into the construction stages over the month. This is lower than the five year average of 1,022 projects per month, but is 11.4% higher than the number that moved into construction in the previous month.</p>
<p>The construction value of projects that commenced over February increased 20.2% on the previous month, to $5.1 billion</p>
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Residential construction activity rebounds in February: CoreLogic

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<p>GUEST OBSERVER</p>
<p>The Westpac Melbourne Institute Index of Consumer Sentiment rose 2.5% to 97.9 in September from 95.5 in August. </p>
<p>The consumer mood remains downbeat with September marking the tenth consecutive month that pessimists have outnumbered optimists.</p>
<p>Pressures on family finances, concerns around interest rates, deteriorating housing affordability and rising energy prices have all weighed on confidence in 2017. These factors are more than offsetting the boost from an improved outlook for jobs particularly when a stronger labour market has not been associated with increased wages growth.</p>
<p>The survey detail shows family finances remain a key area of concern. The ‘finances vs a year ago’ sub-index rose 6.1% but was coming from a very weak read in August (a three year low). Meanwhile the sub-index tracking expectations for ‘finances over the next 12 months’ fell 2.1%, reversing all of last month’s gain.</p>
<p><a href="https://www.propertyobserver.com.au/images/2017/09/13/Screen%20Shot%202017-09-13%20at%2011.02.45%20AM.png" target="_blank">Click to enlarge</a></p>
<p><img src="https://www.urban.com.au/images/2017/09/13/Screen%20Shot%202017-09-13%20at%2011.02.45%20AM.png" alt=""></p>
<p>Consumer expectations for the economy showed more consistent gains. The ‘economic conditions, next 12 months’ sub-index rose 2.7% and the ‘economic conditions, next 5 years’ sub-index posted a robust 5.1% gain.</p>
<p>While both are still in pessimistic territory below 100 they are now marginally above long run average levels. The improved but still ‘lukewarm’ sentiment towards the economy likely reflects the somewhat mixed picture from recent data including the June quarter national accounts which showed a reasonably solid 0.8% gain in GDP but subdued annual growth and notable areas of weakness around household incomes and consumer spending.</p>
<p>Consumers were slightly more positive towards major purchases, the ‘time to buy major a household item’ sub-index rising 2.1% in September. However again the rise was small and, coming off a weak August read, the sub-index remains well below its long run average.</p>
<p>The September survey included additional questions on news recall that provide further insight into the factors shaping sentiment. Interestingly, recall levels have fallen significantly over the last three years suggesting consumers may be getting less exposure to news in general.</p>
<p>In September the topic areas with the highest recall were ‘economic conditions’ (21%); ‘budget and taxation’ (17%); interest rates (16%); inflation (16%); jobs (15%); and international conditions (12%). While news on all fronts was viewed as unfavourable, consumers rated news on inflation and international conditions as much more negative than three months ago – likely reflecting sharp increases in energy costs and developments around North Korea. The only material improvement was around jobs where news was viewed much less negatively than in June.</p>
<p>The improved labour market situation was also broadly apparent in the Westpac Melbourne Institute Unemployment Expectations Index. Although the index edged up 0.9% in the month, at 133.6 it is still down 4.8% from its June level and the second lowest reading since 2011 (recall that lower reads mean more consumers expect unemployment to fall in the year ahead).</p>
<p>Consumer views around housing were mixed in September. The ‘time to buy a dwelling’ index rose 0.8% but at 95.2 remains at very low levels by historical standards. State indexes continue to vary widely, ranging from a very weak read in NSW (81.3) to a strongly positive result in WA (130.4). Consistent falls in prices in WA over recent years may be finally restoring affordability to attractive levels.</p>
<p>The Westpac Melbourne Institute Index of House Price Expectations dipped 2.8% but at 141.5 remains high overall. Of those consumers with a view, 57% expect prices to rise in the year ahead, 31% expect no change and 12% expect prices to decline.</p>
<p>Responses to additional questions on the ‘wisest place for savings’ continued to indicate risk aversion. Nearly two thirds of consumers still favour safe options – deposits, superannuation or paying down debt – with only 10.5% nominating real estate, a new 40 year low, and 9% nominating shares. More consumers favour ‘pay down debt’ (23.5%) than real estate and shares combined.</p>
<p><a href="https://www.propertyobserver.com.au/images/2017/09/13/Screen%20Shot%202017-09-13%20at%2011.18.40%20AM.png" target="_blank">Click to enlarge</a></p>
<p><img src="https://www.urban.com.au/images/2017/09/13/Screen%20Shot%202017-09-13%20at%2011.18.40%20AM.png" alt=""></p>
<p>The Reserve Bank Board next meets on October 3. There is no doubt that the Board will continue to leave the cash rate on hold.</p>
<p>Of more interest is the medium term outlook for interest rates. While those commentators favouring rate hikes next year point to record business conditions we are starting to see a considerable gap open up between business conditions and business confidence. Persistent weak consumer sentiment, consistent with weak consumer demand, may be worrying businesses around the sustainability of current strong conditions.</p>
<p>From our perspective prospects for consumer spending and residential construction appear soft. We do not expect that economic conditions in Australia in 2018 will be consistent with the need for the Bank to raise rates. </p>
<p> </p>
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<p><span><em>BILL EVANS</em><em> is chief economist of <a href="https://www.westpac.com.au/" target="_blank">Westpac</a>.</em> </span></p>
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bevans-rYk9SxEa4r

Time to buy a dwelling index up, still at very low levels: Bill Evans

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<p>Sales slid in both the detached housing and multi unit market during June according to the latest New Home Sales Report from the Housing industry Association.</p>
<p>According to the HIA, new home sales in Australia’s largest states hit their lowest level since October 2013.</p>
<p>Shane Garrett, HI senior economist said during June, new home sales declined by 6.9 percent compared with the previous month and were 11.9 percent lower than the same period last year.</p>
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<p><span>“These results support HIA’s latest set of forecasts that new dwelling commencements are set to </span><span>continue easing until late 2018," he said.</span></p>
<p><span>“</span><span>The reduction in sales of both detached houses and multi-units during the month of June continues the trend underway since sales peaked in early 2015. </span></p>
<p><span>“</span><span>The fall in sales needs to be considered against the backdrop of residential building coming off a record peak of activity in 2016. We project that residential building will still be operating at a historically high level</span><span>."</span></p>
<p><a href="https://www.propertyobserver.com.au/images/2017/07/31/Screen%20Shot%202017-07-31%20at%2010.41.43%20AM.png" target="_blank"><span>Click to enlarge</span></a></p>
<p><span><img src="https://www.urban.com.au/images/2017/07/31/Screen%20Shot%202017-07-31%20at%2010.41.43%20AM.png" alt=""></span></p>
<p><span>The reduction in new home sales during June 2017 was made up of a 5.8 percent reduction in new detached house sales and a 10.7 percent fall in new multi-unit sales. </span></p>
<p><span>According to the HIA there were considerable differences in sales in June around the states with new detached house sales rising both in Victoria (+4.1 percent) and Western Australia (+21.1 percent). However, sales fell in New South Wales (-9.7 percent), Queensland (-29.3 percent) and South Australia (-23.7 percent) during the month. </span></p>
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jonathanchancellor-7SQnKwU6yx

New home sales hit lowest level since 2013

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<p>GUEST OBSERVER</p>
<p>Total new lending commitments (housing, personal, commercial and lease finance) fell by 3.1 per cent in May to a 3-month low. Commitment are down 0.5 per cent over the year.</p>
<p>Trends: In trend terms, loans for alterations and additions of homes (renovations) hit 7-year highs. Personal loans hit a 141⁄2-year low in May. Annual lending to buy land hit record highs.</p>
<p>Airfares: In smoothed terms, discount airfares are up by 6.2 per cent on a year with restricted economy fares up 4.9 per cent and business airfares up 2.5 per cent.</p>
<p>Chinese trade: In June, exports were up 11.3 per cent on a year ago (forecast +8.7 per cent). Imports were up 17.2 per cent (forecast +13.1 per cent). The trade surplus rose from US$40.81 billion to US$42.77bn.</p>
<p>The lending figures have implications for builders, housing-reliant businesses, finance providers, retailers, and companies dependent on consumer and business spending. The Chinese trade data can affect currency markets and provide insights for exporters and importers.</p>
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<p>What does it all mean?</p>
<p>New data shows that renovation loans hit 7-year highs in trend terms in May, suggesting that more people have decided to stay put and add extra rooms or revamp kitchens and bathrooms. Still others may be sprucing up their homes for sale, following the advice on TV makeover shows. Whether it is the purchase of a new property or updating an existing abode, the family home is the centre of the universe.</p>
<p>While some have been taking out bigger loans to buy homes, it is clear that consumers more generally are paring back other forms of debt. Figures out yesterday show that credit card debt continues to shrink when compared with a year ago and non-housing loan commitments are at the lowest levels for over 14 years. High and rising debt tends to get plenty of coverage, not so the more conservative attitude to debt which is actually the more dominating trend.</p>
<p>If consumer balance sheets were in such bad shape, more Aussie would be speaking to banks about consolidating or refinancing existing debt. Rather, debt consolidation and refinancing accounts for just 20 per cent of personal lending commitments – a 16 1⁄2-year low.</p>
<p>Inflation is starting to creep back into consciousness. New data shows airfares are lifting with discount fares over six per cent higher on a year ago. And the Melbourne Institute reported today that its measure of inflation expectations ((30-percent trimmed mean measure), rose to a 4-year high of 4.4 per cent in July.</p>
<p>What do the figures show?</p>
<p>Lending Finance:</p>
<p>Total new lending commitments (housing, personal, commercial and lease finance) fell by 3.1 per cent in May to a 3-month low. Commitment are down 0.5 per<br> cent over the year.</p>
<p>All housing finance rose by 3.1 per cent in May with construction and purchase up 2.9 per cent and alterations and additions up 10.1 per cent.<span style="font-size: 12.16px;"> </span></p>
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<p>In trend terms, loans for alterations &amp; additions hit 7-year highs in May.</p>
<p>Commercial finance fell by 6.4 per cent in May after falling 6.1 per cent in April and rising by 14.2 per cent in March. Within commercial commitments, fixed lending fell by 4.9 per cent while revolving credit fell by 12.5 per cent. Commercial loans are up 0.4 per cent on a year ago.</p>
<p>Personal finance fell by 0.5 per cent in May – the fifth straight decline. Fixed lending commitments rose by 1.2 per cent, while revolving credit commitments fell by 3.1 per cent. Personal loans are down 18.4 per cent on a year ago. In trend terms personal loans are at 141⁄2-year lows.</p>
<p>Lease finance rose by 1.1 per cent in May to stand 25.4 per cent higher over the year.</p>
<p>Chinese trade:</p>
<p>In June, exports were up 11.3 per cent on a year ago (forecast +8.7 per cent). Imports were up 17.2 per cent (forecast +13.1 per cent). The trade surplus rose from US$40.81 billion to US$42.77 billion.</p>
<p>Airfares:</p>
<p>The Bureau of Infrastructure, Transport and Regional Economics (BITRE) reports that business class airfares fell by 0.1 per cent in July after falling 0.9 per cent in June. Business class airfares still stand 2.2 per cent higher than a year ago. In smoothed terms, business class airfares are up 2.5 per cent on the year.</p>
<p>“Restricted economy” airfares rose by 1.9 per cent in July after lifting 0.8 per cent in June. Restricted economy airfares are up 5.8 per cent on a year ago – the strongest growth in 18 months. In smoothed terms, restricted economy fares were up by 4.5 per cent on a year ago – the strongest growth in 17 months.</p>
<p>Discount fares fell by 2.3 per cent in July after falling by 4.9 per cent in June and rising by 8.3 per cent in May. Clearly discount fares have been volatile in recent months. Discount fares are up 5.9 per cent over the year. In smoothed terms (13 month moving average), discount fares are up 6.2 per cent.</p>
<p>Inflation expectations:</p>
<p>According to the Melbourne Institute Survey of Consumer Inflationary Expectations, the expected inflation rate (30-per cent trimmed mean measure), rose by 0.8 percentage points to 4.4 per cent in July from 3.6 per cent in June.</p>
<p>What is the importance of the economic data?</p>
<p>Lending Finance is released monthly by the Bureau of Statistics and contains figures on new housing, personal, commercial and lease finance commitments. The importance of the data lies in what it reveals about the appropriateness of interest rate settings, confidence and spending levels in the economy.</p>
<p>China’s National Bureau of Statistics releases its monthly economic statistics around mid-month. Quarterly GDP data is released around the 19th of January, April, July and October. China’s Customs Office releases trade data, and the People’s Bank of China releases financial statistics, around the 10th of each month. China is </p>
<p>Australia’s largest trading partner and changes in the Chinese economic have major implications for the Aussie economy.</p>
<p>The Bureau of Infrastructure, Transport and Regional Economics (BITRE) releases regular aviation data. The BITRE releases the Australian Domestic Airline Activity publication each month as well as the Domestic Air Fares publication. The data provides insights on airline activity as well as trends in the broader Australian economy. If more people are flying, then it suggests businesses are more active and/or consumers are more confident.</p>
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<p>What are the implications for interest rates and investors?</p>
<p>Consumers and businesses aren’t keen to take on new debt. The main exceptions being loans to buy or renovate homes or to buy a new or used car. In total though, personal lending is the lowest in 141⁄2 years. And for the past six months both commercial and lease loans have been shrinking when compared with a year ago.</p>
<p>Inflation is starting to return to our consciousness. While it is still early days, it is a trend worth watching as higher inflation rates naturally mean higher cash rates.</p>
<p>The latest Chinese data is encouraging with both exports and imports well up on a year ago and the trade surplus expanding as well as beating forecasts. China is Australia’s largest trading partner and a strong Chinese economy is in our interests. </p>
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<p class="p1"><span class="s1"><em>Craig James is the chief economist at </em><a href="https://www.comsec.com.au/default.aspx"><span class="s2"><em>CommSec</em></span></a><em>.</em> </span></p>
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