<p>A new 25-storey apartment tower proposed for Mercer Street would push Geelong’s western gateway skyline higher, with Morphy Birrell Property Group lodging plans for a project directly beside one of the city’s most significant heritage streetscapes.</p>

<p>The <a href="https://www.apartments.com.au/architects/fk-australia">FK</a>-designed development at <a href="https://www.apartments.com.au/new-apartments/65-67-mercer-street-geelong-vic-3220">65-67 Mercer Street</a> has now been referred to Victoria’s Planning Minister. The site sits opposite the Geelong rail corridor and immediately south of the heritage-listed St Peter and Paul’s Catholic Church and Ashby Hall precinct.</p>

<p>Rather than compete with the neighbouring ecclesiastical buildings, the proposal adopts a sculpted podium intended to reference the materiality and scale of the heritage context. Planning documents note the design draws cues from the “dark stone brick” church and surrounding masonry buildings, while the tower above transitions into a softer, curved form oriented toward Corio Bay and the Geelong waterfront.</p>

<p><img alt="First look: Morphy Birrell Property Group targets 25-storey Geelong tower beside landmark church precinct" data-entity-type="file" data-entity-uuid="b797d10c-d4a6-47af-b8df-1aeaa3b382be" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/public%20square.png?VersionId=QGIpcz1x1hKB6lQLl2iobyHqb6PS2Ztc" /></p>

<p>The development forms “Stage 5” of Morphy Birrell Property Group’s broader Mercer Street precinct strategy, following the completion of the 21-storey Miramar tower on Cavendish Street and several additional approved redevelopment stages nearby. Planning consultants Ratio said the proposal “represents an exemplary development outcome” aligned with the strategic ambitions for Central Geelong’s continued urban renewal.</p>

<p>The mixed-use project would replace an existing low-rise commercial building and surface parking area on the 3,320 sqm corner site. FK’s urban context report describes the proposal as a residential development comprising apartments, resident amenities, commercial space, and integrated landscaping positioned to maximise bay views and northern sunlight access.</p>

<p>Renders show a deeply articulated tower with curved balconies stepping above a lower masonry podium that frames a landscaped forecourt facing Mercer Street. The design intentionally preserves sightlines toward the adjacent church buildings, with the podium scaled to reinforce the heritage edge before the tower recedes upward.</p>

<p><img alt="First look: Morphy Birrell Property Group targets 25-storey Geelong tower beside landmark church precinct" data-entity-type="file" data-entity-uuid="2bdca91e-66f7-4ac7-8baa-2f93bd5b564e" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/geelong%20site.png?VersionId=QOhbino4ZgzKYw5dW3QE14E.2yq.Sv87" /></p>

<p>The planning report highlights the site’s strategic location within 400 metres of key Geelong destinations including Cunningham Pier, the Geelong Station precinct, Deakin University, and the convention centre. Bus services run directly along Mercer Street, while the Corio Bay foreshore sits around 100 metres north of the site.</p>

<p>The proposal arrives amid accelerating redevelopment across central Geelong, where planning policy continues to encourage higher-density housing close to transport infrastructure and the waterfront. Mercer Street in particular has emerged as a focal point for taller apartment development due to its proximity to Geelong Station, the bay, and major civic infrastructure.</p>


Joel Robinson

Morphy Birrell Property Group targets 25-storey Geelong tower beside landmark church precinct

<p>Development giant&nbsp;<a href="https://www.apartments.com.au/developers/hamton">Hamton</a> and joint venture partner Hostplus have revealed the next residential stage of their $3 billion Moonee Valley Park masterplan, lodging plans for 512 more apartments within the precinct on surplus racecourse land at 110 Wilson Street, Moonee Ponds.</p>

<p>The proposed development, dubbed&nbsp;<a href="https://www.apartments.com.au/new-apartments/trackside-house-110-wilson-street-moonee-ponds-vic-3039">Trackside Gardens</a>&nbsp;in the planning application, follows the <a href="https://www.apartments.com.au/news/vic/first-look-exclusive-hamton-and-hostplus-reveal-sixth-stage-of-moonee-valley-park-masterplan">recent unveiling of the sixth-stage Cox Place Precinct</a> and continues the long-running transformation of the Moonee Valley Racecourse into one of Melbourne’s largest urban renewal projects.</p>

<p>Positioned on the north-eastern edge of the racecourse adjacent to CityLink, Trackside Gardens will comprise three residential buildings rising between 61.8 metres and 86.4 metres within a heavily landscaped precinct shaped by Hamton’s Nature Based Cities framework.</p>

<p>The project forms part of the broader Moonee Valley Park redevelopment being delivered by Hamton, Hostplus and the Moonee Valley Racing Club, which is reshaping the 40-hectare racecourse site into a mixed-use neighbourhood with housing, retail, commercial space, hotels, parkland and community infrastructure.</p>

<p>Trackside Gardens sits separately to the recently proposed Cox Place Precinct, a five-building stage comprising around 1,100 residences, two build-to-rent buildings, two build-to-sell towers, retail, office space, and a hotel overlooking the racetrack. Together, the projects continue to accelerate housing delivery across the precinct.</p>

<p><img alt="First look: Hamton expands Moonee Valley Park masterplan with 512-home Trackside Gardens precinct" data-entity-type="file" data-entity-uuid="5fc1941e-52d3-41c6-abc4-0f13fe8ae5ea" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/DA%20Edits%20%281%29.png?VersionId=7qwRHq5dcvXWNot2hNOgoQhN2GIWudNK" /></p>

<p>Designed by <a href="https://www.apartments.com.au/architects/dko-architecture">DKO Architecture</a> with landscape architecture by Tract, Trackside Gardens has been conceived as a botanical-style residential precinct prioritising canopy planting, communal green space, and vertical landscaping.</p>

<p>“The architectural vision for the proposed development centres around buildings in a botanical park setting that champions the important role of nature,” the planning submission states.</p>

<p>“The proposal incorporates principles of biophilic design, with landscape and environmentally sustainable development influencing the ultimate design response of the buildings and prioritising the ground plane to ensure a high amenity for both occupants and visitors.”&nbsp;</p>

<p>Trackside Gardens will deliver 512 apartments across the three buildings, alongside 518 basement car spaces and 523 bicycle spaces. Around 20 per cent affordable housing is proposed across the broader North East Precinct, equating to around 158 dwellings.&nbsp;</p>

<p>The affordable housing component will be concentrated within the Wilson East building, while the remaining apartments are expected to be delivered as build-to-sell residences.</p>

<p>Trackside Gardens has been designed around Hamton’s Nature Based Cities initiative, founded by Executive Chair Paul Hameister OAM in partnership with the University of Melbourne, Urbis, Ark Resources and Tract. The initiative promotes integrating higher-density urban development with significant biodiversity, tree canopy and landscape outcomes.</p>

<p><img alt="First look: Hamton expands Moonee Valley Park masterplan with 512-home Trackside Gardens precinct" data-entity-type="file" data-entity-uuid="89353449-7b3c-42fd-8fd8-8bf64a5ef80f" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Article%20Feature%20Image%20%28Grid%29_4.png?VersionId=X8jRt0P2L7fIWjLhfX6gPknXToXIBeLj" /></p>

<p>A comprehensive landscape strategy would introduce deep soil planting, vertical greening, communal gardens, and new pedestrian links throughout the site.</p>

<p>Planning documents state the development is targeting a 5 Star Green Star Buildings rating, a 7.5-star average NatHERS rating, and “Exemplary” Nature Based Cities certification.&nbsp;</p>

<p>The proposal joins an expanding pipeline of approved and proposed buildings within Moonee Valley Park, including the recently launched Eveline apartments and the approved Grandstand North and South towers.</p>

<p>Hamton has increasingly focused on precinct-scale, nature-led communities across Melbourne’s middle-ring suburbs, with projects spanning Hawthorn, Kew, and Moonee Ponds.</p>


Hampton unveils Trackside Gardens, latest stage of $3 billion Moonee Valley Park masterplan

<p>The Paul Gedoun-led <a href="https://www.apartments.com.au/developers/ss-projects">S&amp;S Group</a> has achieved another milestone in its $1 billion transformation of Rainbow Bay on the southern Gold Coast with the completion of the company’s third project in four years, the $160 million <a href="https://www.apartments.com.au/buildings/esprit-217-227-boundary-street-coolangatta-qld-4225">Esprit</a> residences.</p>

<p>Delivered by <a href="https://www.apartments.com.au/builders/hutchinson-builders">Hutchinson Builders</a> and designed by <a href="https://www.apartments.com.au/architects/cottee-parker-architects">Cottee Parker Architects</a>, Esprit buyers have now moved into the 94 apartments across two interconnected buildings at 217-227 Boundary Street.</p>

<p>The successful settlement of Esprit marks another astounding chapter in the S&amp;S story, which launched its highly successful Flow apartments three years ago and created its own ultra-luxury branded fingerprint on an area craving new luxury residences.</p>

<p>Most early purchasers have secured gains of well over $1 million since the project launched in 2021.&nbsp;</p>

<p>[smartcode_project:default project_id=102921 project_image_fid=172129]</p>

<p>S&amp;S Projects Founding Director Paul Gedoun said the completion of Esprit reflects sustained demand for premium apartments in tightly held coastal locations.&nbsp;<br />
&nbsp;&nbsp; &nbsp;<br />
“Esprit has attracted buyers seeking a combination of quality design, considered amenity and a location that is becoming increasingly difficult to replicate,” said Gedoun.</p>

<p>“We identified some years ago that Rainbow Bay is a unique market where supply of luxury residences is limited, and we see the settlements in Esprit further underpinning this thinking - that for both owner-occupiers and investors.”&nbsp;</p>

<p>[smartcode_project:default project_id=102921 project_image_fid=172174]</p>

<p>A key feature of the development is ‘Club Esprit’, a 1,000sqm residents-only rooftop level combining wellness and recreation, believed to be a first for the Gold Coast, and which is fast becoming a signature of the S&amp;S brand.</p>

<p>Positioned to capture views across Snapper Rocks, Rainbow Bay and the Tweed River, the rooftop includes a 25-metre lap pool, gym, yoga lawn, sauna and steam facilities, ice bath, private dining spaces, outdoor cinema and landscaped areas for residents.&nbsp;</p>

<p><a href="https://www.apartments.com.au/project-marketer/pezet-matheson">Pezet Matheson</a> Director Jayde Pezet, who led the sales campaign for Esprit and S&amp;S’s Flow and Awaken apartments, said the project’s performance reflects both the strength of the product and the depth of demand for premium apartments on the southern Gold Coast.&nbsp;</p>

<p>“In some cases, we’ve seen values double since launch, which is a clear reflection of how tightly held Rainbow Bay has become and the level of demand for well-executed projects in this market,” said Pezet.&nbsp;</p>

<p>“Buyers recognised early what S&amp;S Projects was delivering here, and that conviction has been rewarded as the project has progressed towards completion.”&nbsp;</p>

<p>[smartcode_project:default project_id=102921 project_image_fid=214819]</p>

<p>Esprit offers a mix of two- three and four-bedroom apartments and sits within walking distance of the beachfront, cafés and local amenities, reinforcing its appeal as both a lifestyle and investment destination.</p>

<p>The project is the third completed by S&amp;S Projects in Rainbow Bay, following Flow Residences and Awaken Residences, which together have contributed to the suburb’s emergence as one of the Gold Coast’s most sought-after coastal pockets. &nbsp;</p>

<p>S&amp;S Projects is continuing its investment in the area with Radia, a $215 million development currently under construction.&nbsp;</p>

<p>[smartcode_project:default project_id=102921 project_image_fid=172175]</p>

<p>Gedoun said the completion of Esprit signals continued confidence in the southern Gold Coast market.&nbsp;</p>

<p>“We’ve seen strong interest in well-located, high-quality apartments, particularly in areas where future development opportunities are limited."</p>

<p>“That’s been a key factor in the performance of Esprit and the broader Rainbow Bay market”.</p>

<p>[smartcode_project_cta:default project_id=102921]</p>


Owners move in as Esprit completes at Rainbow Bay

<p>Few developers can boast a portfolio across South East Queensland's luxury markets quite like <a href="https://www.apartments.com.au/developers/mosaic-property-group">Mosaic Property Group</a>.</p>

<p>The builder-developer, founded in 2004 by Managing Director Brook Monahan, has projects in planning, on the market, and under construction, from Burleigh Heads and Broadbeach to Kangaroo Point and South Brisbane.</p>

<p>With a pipeline exceeding $2 billion, Mosaic remains highly selective when it comes to development sites, having spent years refining its strategy around feasibility research and product planning. The group is set to continue growing into 2026 and beyond.</p>

<p>In Brisbane, Mosaic currently has three projects in the market. It is in the final release stage at <a href="https://www.apartments.com.au/new-apartments/the-bedford-by-mosaic-16-30-prospect-street-kangaroo-point-qld-4169">The Bedford</a> in Kangaroo Point, which is approaching complete sellout ahead of its late 2027 completion.</p>

<p>[smartcode_project:default project_id=134792 project_image_fid=328123]</p>

<p>Designed in collaboration with <a href="https://www.apartments.com.au/architects/bda-architecture">BDA Architecture</a>, The Bedford comprises 128 two- and three-bedroom residences. A selection of ultra-luxury Masterpiece Series Skyhomes, positioned across the top levels, offer expansive floor plans and sweeping views of the river and city.</p>

<p>High-end inclusions, such as natural stone benchtops, bespoke cabinetry, and Miele appliances, feature throughout all apartments, alongside the Rooftop Recreation &amp; Retreat Sky Terrace. This includes a resort-style pool with sun deck and loungers, spa, cold plunge pool, sauna, steam room, private dining room with a full kitchen, residents' lounge, multiple barbeque and relaxation zones, an outdoor viewing deck, and landscaped gardens with water features, all oriented to sweeping city and river views.</p>

<p>A gym with indoor and outdoor zones, and a golf simulator, further enhances recreational choice within the building.</p>

<p>[smartcode_project:default project_id=134792 project_image_fid=328119]</p>

<p>A defining feature of the development is its integrated mixed-use component, which will deliver Kangaroo Point's first major supermarket, alongside a café and liquor store, bringing long-awaited convenience to the peninsula.</p>

<p>Monahan says The Bedford represents the culmination of a near-decade-long journey, after first identifying the A-grade Prospect Street site in 2016. While they came close to acquiring it at the time, the site was ultimately purchased by Woolworths' development arm, Fabcot. The opportunity resurfaced in 2024 when the site, vacant for nearly three decades, was brought back to market.</p>

<p>Monahan says Mosaic projects often begin years before any formal plans are drawn. Their new South Brisbane development is no exception, with the site first earmarked in 2018.</p>

<p>"We aren't opportunistic," Monahan says. "Every site purchase is carefully considered. As seen with Kangaroo Point and South Brisbane, it can take years to eventuate. There are sites we're looking at now that we may not secure for several years."</p>

<p>[smartcode_project:default project_id=141711 project_image_fid=353495]</p>

<p>A similar story unfolded at <a href="https://www.apartments.com.au/new-apartments/the-carter-by-mosaic-77-linton-street-kangaroo-point-qld-4169">The Carter</a> in Kangaroo Point, opposite The Gabba. Like The Bedford, it is also approaching sellout of its 125 two- and three-bedroom apartments. The majority of sales are attributed to returning customers and referrals, with a balanced mix of investors and a strong majority of owner-occupiers.</p>

<p>BDA Architecture was again engaged to design the 22-storey building, which will feature a suite of wellness and lifestyle amenities, including a golf simulator and cinema, a commercial-grade gym, and a rooftop recreation level with a pool, steam room, sauna, cold plunge, teppanyaki bar, private dining spaces, and landscaped terraces.</p>

<p>Construction is on track for completion in mid-2027.</p>

<p>[smartcode_project:default project_id=151614 project_image_fid=362759]</p>

<p>Mosaic's latest offering is its most ambitious yet, boasting a rare, north-facing riverfront position on Montague Road in South Brisbane.</p>

<p><a href="https://www.apartments.com.au/new-apartments/the-riversdale-by-mosaic-south-brisbane-91-montague-road-south-brisbane-qld-4101">The Riversdale by Mosaic</a> is a 39-storey tower comprising just over 200 residences and Masterpiece Series Sky Homes. Designed in partnership with Bureau Proberts, it will feature nearly 3,000 sqm of genuine, internationally benchmarked six-star, hotel-style amenities, including a wellness precinct, pool, gym, massage and treatment rooms, cinema, golf simulator, and extensive outdoor dining areas across a two-level rooftop deck.</p>

<p>Early works are underway, with full construction expected to commence in the second half of 2026, and an anticipated late 2029 completion.</p>

<p>[smartcode_project:default project_id=151614 project_image_fid=362759]</p>

<p>Since 2012 alone, Mosaic has completed more than $2 billion in projects and is set to deliver another $2 billion worth of developments, comprising hundreds of luxury apartments, each defined by Mosaic's signature standards of quality, detail, and delivery.</p>

<p>"We never arrive, there is no finish line," says Monahan. "Our ambition is to keep evolving what luxury means, creating design- and lifestyle-led residences in incredible locations, places people genuinely aspire to and want to live, homes that are loved deeply and endure long beyond their moment."</p>


Mosaic's Midas Touch

<p><a href="https://www.apartments.com.au/developers/urban-property-group">Urban Property Group</a> (Urban) has broken ground at Keira Place, its new major mixed-use residential precinct in the heart of Wollongong CBD.</p>

<p>Held at 120-122 Smith Street, the groundbreaking marked the commencement of construction on Stage 1 of <a href="https://www.apartments.com.au/new-apartments/keira-place-120-122-smith-street-wollongong-nsw-2500">Keira Place</a>, with the opening of the new display suite.<br />
&nbsp;<br />
Keira Place is a State Significant Development that will deliver new housing supply, affordable homes and inclusive living options within walking distance of Wollongong’s CBD, coastline, transport, hospital and education precincts.</p>

<p>[smartcode_project:default project_id=144442 project_image_fid=369868]<br />
&nbsp;<br />
Stage 1 is now under construction and will deliver 150 apartments across two residential buildings, including 27 affordable housing apartments and 18 specialist disability accommodation dwellings, along with activated ground-floor retail and commercial space.<br />
&nbsp;<br />
Urban Co-CEO Patrick Elias said the groundbreaking represented a significant milestone for Wollongong and reflected Urban’s long-term commitment to regional cities.</p>

<p>“Today’s groundbreaking is about turning approvals into homes and moving quickly to deliver much-needed housing in Wollongong’s city centre,” Elias said.<br />
&nbsp;<br />
“Keira Place will provide a diverse mix of homes close to jobs, transport and services, while setting a high benchmark for quality, durability and consumer protection.”</p>

<p>[smartcode_project:default project_id=144442 project_image_fid=369869]<br />
&nbsp;<br />
Hon. Paul Scully MP, Minister for Planning and Public Spaces, Member for Wollongong said Keira Place is exactly the kind of development Wollongong needs – delivering new homes close to transport, employment and services, while supporting the continued growth and renewal of the CBD.</p>

<p>"This project reflects the Minns Labor Government's commitment to increasing housing supply in well-located areas."<br />
&nbsp;<br />
Wollongong Lord Mayor Cr Tania Brown said Keira Place would deliver lasting community benefits for the city.<br />
&nbsp;<br />
"Keira Place is a welcome addition to Wollongong's CBD delivering new housing, affordable homes and activated street-level spaces that will benefit our community for years to come," Brown said.<br />
&nbsp;<br />
"Urban Property Group's investment reflects the confidence that quality developers have in Wollongong's future, and I look forward to seeing this precinct come to life."</p>

<p>[smartcode_project:default project_id=144442 project_image_fid=369867]<br />
&nbsp;<br />
Designed by <a href="https://www.apartments.com.au/architects/cox-architecture">Cox Architecture</a>, with interiors by <a href="https://www.apartments.com.au/interior-designers/dko">DKO,</a> Keira Place prioritises liveability and long-term performance, with landscaped shared spaces, generous apartment layouts and a pedestrian-friendly streetscape along Smith Street.<br />
&nbsp;<br />
Residents will have access to landscaped podium areas, communal rooftop amenities with views to Mount Keira and the Wollongong skyline, and convenient ground-level retail.</p>

<p>The development will have 10-year Latent Defects Insurance by Resilience Insurance.</p>

<p>[smartcode_project_cta:default project_id=144442]</p>


Groundbreaking marks start of construction at Keira Place in Wollongong CBD

Residential Housing

<html><body>
<div>There's a theory that hosing down investor demand should have no impact on rents.</div>
<div> </div>
<div>That's because <em>in theory</em> for every property that isn't bought by an investor, an owner-occupier buys instead, and thus  the balance of supply and demand for rental properties remains unchanged. <br><br>In the real world capital city property markets don't work like that. In reality, many are renters either by choice or by circumstance, such as new graduates, transient employees, international or interstate visitors, and other folk who prefer taking a rental close to the city to ownership in the outer suburbs. Many others simply don't have an available deposit saved, so buying is not an option for them. </div>
<div> </div>
<div>As such rental growth is to a large extent determined by the growth in demand for rentals - underpinned over time by population growth - and by the relative activity of investors. For example, rents in Australian capital cities (and especially Sydney) boomed in 1986 and again in 2008 both of which were periods when investor buying had crashed in half.</div>
<div> </div>
<div><a href="/images/2016/04/11/A2.jpg" target="_blank">Click to enlarge</a></div>
<div><img src="/images/2016/04/11/A2.jpg" alt=""></div>
<div> </div>
<div>For this reason it will be interesting to see what impact APRA's crackdown has on apartment rents in Sydney.</div>
<div> </div>
<div>I've rented out several properties in Sydney in recent months, all of them for more than last year. However, the properties in question are in high demand areas such as on the Sydney harbourside, and as such are not likely to be very representative of what is happening in construction pockets like, say, Parramatta or Green Square. </div>
<div> </div>
<div>Domain reported last week that as at March 2016 Sydney apartment rents were up by +4.0 per cent of 2016 from one year ago to a record median high of $520/week, with apartment rents now nearly as high as median house rents of $530/week in the harbour city. CoreLogic-RP Data has Sydney apartment rents +3.4 per cent higher than one year ago, and SQM Research records an increase of +5.7 per cent.</div>
<div> </div>
<div>To date this may in part simply be due to newer stock coming online, which typically is advertised for rent at higher prices than the older stock it often replaces. And we shouldn't be expecting runaway growth in rents any time soon, since investor activity is still at a historically high level, even after APRA's dampening of the buy-to-let sector.</div>
<div> </div>
<div>While it's still early days, this trend is certainly one to watch. Markets are quite complex beasts when you drill into the detail, with endless subtle balances and counter-balances, and in an expensive capital city such as Sydney with a growing population rental growth is likely to continue to have an inverse relationship to investor activity. </div>
<div> </div>
<div>Another trend that is worth watching I looked at here, and that is that inner Sydney vacancy rates have tightened while vacancy rates in secondary and outers areas of Sydney are rising.</div>
<div> </div>
<div>A question for today, then: could it be that foreign buyers of apartments are leaving their inner city units vacant?</div>
<div> </div>
<div><strong><span style="text-decoration: underline;">FIRB data curve ball</span></strong></div>
<div> </div>
<div>In the 1980s Japanese buyers famously  bought heavily into Gold Coast property, but then promptly withdrew funds as the economic outlook soured. As I mused in some detail here, the FIRB data shows that through this cycle there has been an unprecedented surge in Chinese investment in Australian real estate, on a scale never before seen.</div>
<div> </div>
<div><a href="/images/2016/04/11/FIRB4.jpg" target="_blank">Click to enlarge</a></div>
<div> </div>
<div><img src="/images/2016/04/11/FIRB4.jpg" alt=""></div>
<div> </div>
<div>If you've been following some of my pieces over the years, you'll know that I aim to identify new trends well before you read about them in the wider media, which of course sometimes means being wrong. </div>
<div> </div>
<div>On the topic of localised apartment oversupply, such as in Sydney's inner south, for example, I was yapping on about this emerging risk way back in 2013, long before it ever became a standard media topic <em>du jour</em>.</div>
<div> </div>
<div>In that spirit, here's a possible anti-counter-contrarian view for you: maybe the high-rise building approvals boom won't prove to be such a big a deal after all? There are plenty of risk areas around, for sure, including some already alluded to above, but here are some lines of reasoning to consider:</div>
<div> </div>
<div>-<a href="https://petewargent.blogspot.com.au/2016/04/immigration-alley-oop" target="_blank">i</a>mmigration is rising again - and therefore so is population growth - while the construction boom will soon pass its peak</div>
<div> </div>
<div>-in the most populous capital cities at least, annual population growth never really slowed down anyway: it's still tracking at monumentally strong levels in Greater Sydney (+83,300 in FY2015) and Melbourne (+91,600)</div>
<div> </div>
<div>-the numbers of international students forecast to immigrate into the largest cities is vast - I mean, really vast </div>
<div> </div>
<div><a href="/images/2016/04/11/A5.jpg" target="_blank">Click to enlarge</a></div>
<div> </div>
<div><img src="/images/2016/04/11/A5.jpg" alt=""></div>
<div> </div>
<div>-although the take-up of permanent residency by international students to date has not yet been as strong as had been suggested by earlier forecasts, the cumulative intake over the next five years is expected to be truly enormous.</div>
<div> </div>
<div><a href="/images/2016/04/11/A6.jpg" target="_blank">Click to enlarge</a></div>
<div> </div>
<div><img src="/images/2016/04/11/A6.jpg" alt=""></div>
<div> </div>
<div>-the most timely available indicators of education arrivals suggest an unprecedented boom is well underway, with another new record high hit in the month of February.</div>
<div> </div>
<div><a href="/images/2016/04/11/A2.jpg" target="_blank">Click to enlarge</a></div>
<div> </div>
<div><img src="/images/2016/04/11/A2.jpg" alt=""></div>
<div> </div>
<div>-with about 58 per cent of new construction approvals accounted for by foreign  buyers, especially driven by buyers from the Chinese mainland, many may choose not to rent their apartments out, and as such, might not add to the new supply of rental stock at all.</div>
<div> </div>
<div><strong><span style="text-decoration: underline;">Absorption?</span></strong></div>
<div> </div>
<div>Mostly these are familiar points. Certainly both Sydney (35,231) and Melbourne (32,614) have approved a historically high number of attached dwellings over the past year.</div>
<div> </div>
<div><a href="/images/2016/04/11/BA3.jpg" target="_blank">Click to enlarge</a></div>
<div><img src="/images/2016/04/11/BA3.jpg" alt=""></div>
<div> </div>
<div>However, some of these apartments are destined to forever remain in the "approved but not yet commenced" column, approvals are now trending down again, and in the grand scheme of things although there are certainly many cranes on the horizon, these are not outlandish numbers for cities of such a large and expanding population (Greater Sydney will blaze past 5 million in the next few months).</div>
<div> </div>
<div>Moreover, the latest FIRB data show that the Chinese appetite for the purchase of new dwellings through this cycle is statistically unique. What if those Chinese buyers opt to rent out the apartments only on a short-stay basis? Or save them for their soon-to-be international student offspring? Or, most likely, simply never bother to ever bring them to market at all?</div>
<div> </div>
<div>Suddenly Australia's apparent inner city apartment glut, represented by the green line below, could prove to be yet another doomsday scenario that never eventuates.</div>
<div> </div>
<div><a href="/images/2016/04/11/BA1.jpg" target="_blank">Click to enlarge</a></div>
<div> </div>
<div><img src="/images/2016/04/11/BA1.jpg" alt=""></div>
<div> </div>
<div>This is mostly conjecture, and it's not necessarily a base case, or even probable. And there are plenty of risks for the new and high-rise apartment markets in particular, as we have known now for some years.</div>
<div> </div>
<div>Settlement risks are now considerably higher than they were, with increased deposit requirements. And what if there are legislative changes in China which force sales and repatriation of funds? This may not seem rational or realistic, but then again nobody forecast the scale of the Chinese investment boom in the first place, so who really knows what comes next?</div>
<div> </div>
<div>In my opinion, most mainland Chinese investors deliberately invest in Australian and other overseas property markets with no intention of repatriating funds. In many cases, the financial return may not be the only objective, or even the primary objective.</div>
<div> </div>
<div>Keep a close eye on asking rents and vacancy rates. If the inner city markets do begin to tighten contrary to expectations, then this may be an indicator that mainland Chinese buyers are electing not to bring their shiny new apartments to the rental market, at the same time as domestic investor activity is being throttled. </div>
<div> </div>
<div>An interesting week of news ahead, commencing this morning with the Housing Finance data for February.</div>
<div> </div>
<div>January had been a weaker month for housing loan approvals, but then January is never a big month for activity, so the February figures will give us a much clearer picture of likely activity levels of 2016.</div>
<div> </div>
<div>The market consensus forecast is for a moderate rebound in the number of approvals in the month, which broadly fits with what I've been seeing and hearing, that being a steady increase in home loan activity in aggregate. </div>
<div> </div>
<div>On Thursday, the ABS will release the latest March Labour Force figures, which will be the most important data of the week. </div>
<div> </div>
<div>Last month the reported seasonally adjusted unemployment rate declined to 5.8 percent, but there is a fair chance that this volatile monthly reading could revert higher, with analysts expecting a bit of a rebound in both employment and the participation rate (following last month's surprise drop from 65.14 percent to 64.9 percent).</div>
<div> </div>
<div>
<p><span><em>PETE WARGENT is the co-founder of <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blogger</a>.</em><br></span></p>
<p><em>His latest book is <a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank" rel="nofollow">Four Green Houses and a Red Hotel</a>.</em></p>
</div>
</body></html>

pwargent-M4siyDbqQY

Sydney unit rents rise to record high? Pete Wargent

<html><body>
<p>APRA reported that residential housing loan ADI exposures continued to power on, up to $1.49 trillion in the December quarter (and beyond $1.5 trillion in January).</p>
<p>Owner-occupied loans totalled $971 billion, comprising 65 percent of outstanding residential property exposures, an increase of $86.5 billion or 9.8 percent from the prior year.</p>
<p>Meanwhile, the total of outstanding investor loans was $522.4 billion (the balancing 35 per cent of outstanding exposures), for an increase of $23.5 billion or 4.7 percent from last year.</p>
<p>New investment loan approvals were down by 5.8 percent from the prior year, yet still accounted for a punchy 34.2 percent of total new residential loans. </p>
<p>Loans to investors appear very likely to be the target of a crackdown as 2017 rolls on.</p>
<p>As I looked at in a little more detail here, each of the major lenders appear likely to be approaching the speed limit for the growth in their mortgage books, including those that have lodged revisions to historical figures (since these will be adjusted for). </p>
<div id="post-body-5935845614051499789" class="post-body entry-content">
<a href="https://www.propertyobserver.com.au/images/2017/03/06/A1.jpg" target="_blank">Click to enlarge</a><br><div class="separator"> </div>
<div class="separator"><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/03/06/A1.jpg" alt=""></div>
<strong><span style="text-decoration: underline;"><br></span></strong><br><div><strong><span style="text-decoration: underline;">Impairment rise for ADIs</span></strong></div>
<div><span> </span></div>
<div><span>I'm not going to provide much detailed analysis or opinion on this site, but it is worth noting the following from APRA's reported headline figures for ADIs.</span></div>
<div><span> </span></div>
<div><span>-impaired facilities and past due items as a proportion of gross loans and advances was 0.92 percent as at Q4 2016 (an increase from 0.86 percent in the prior year);</span></div>
<div><span> </span></div>
<div><span>-specific provisions hit $7.3 billion at Q4 2016, an increase of $0.8 billion or 12.9 percent from the prior year; and</span></div>
<div><span> </span></div>
<div><span>-specific provisions as a proportion of gross loans and advances was 0.24 percent at Q4 2016, an increase from 0.22 percent in the prior year.</span></div>
<div> </div>
<div>To summarise:<br><br>
</div>
<div class="separator"><a href="https://www.propertyobserver.com.au/images/2017/03/06/APRA.jpg" target="_blank">Click to enlarge</a></div>
<div class="separator"><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/03/06/APRA.jpg" alt=""></div>
<div><em><span style="text-decoration: underline;"> </span></em></div>
<div><em><span style="text-decoration: underline;">Source: APRA </span></em></div>
<div> </div>
<div>This should demand your attention, since it indicates that the cyclical low for impairments has now passed. </div>
<br><div><strong><span style="text-decoration: underline;">Change to new lending</span></strong></div>
<div> </div>
<div>APRA's figures show that riskier "low doc" and other non-standard lending now comprise only a small and decreasing share of the residential mortgage market, which is a positive development.</div>
<div> </div>
<div>Furthermore, most new loans have a loan to value ratio (LVR) of 80 per cent or lower, meaning that - theoretically at least - the majority of new buyers have a significant buffer built in to their purchase. </div>
<div class="separator"> </div>
<div class="separator"><a href="https://www.propertyobserver.com.au/images/2017/03/06/A3.jpg" target="_blank">Click to enlarge</a></div>
<br><div class="separator"><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/03/06/A3.jpg" alt=""></div>
<div> </div>
<div><span>A potential challenge to this case is that in many instances those using 20 percent deposits have likely sourced their deposits from existing residential property assets, and therefore the risk in such loans may be higher than it appears at first blush. </span></div>
<div><span> </span></div>
<div><span>Interest-only loans, while accounting for a smaller share of the market than has previously been the case, still represent a very significant chunk of new lending at 36.6 percent (even if the total of interest-only lending for the quarter of $162 billion represents a decrease of 10.5 percent from the prior year).</span></div>
<div><span> </span></div>
<div><a href="https://www.propertyobserver.com.au/images/2017/03/06/A2.jpg" target="_blank"><span>Click to enlarge</span></a></div>
<br><div class="separator"><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/03/06/A2.jpg" alt=""></div>
<br><div>The inherent risk here is that when these loans reach the end of their interest-only period the repayments may jump higher in the event that the loan cannot be rolled over into a new interest-only period, a point which has aroused the scrutiny of short sellers.</div>
<div> </div>
<div>Summarily, residential property exposures now comprise a very significant sum of interest-only mortgages in Australia. </div>
<div> </div>
<div><a href="https://www.propertyobserver.com.au/images/2017/03/06/PARA2.jpg" target="_blank">Click to enlarge</a></div>
<div> </div>
<div class="separator"><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/03/06/PARA2.jpg" alt=""></div>
<div> </div>
<div><em><span style="text-decoration: underline;">Source: APRA</span></em></div>
<div> </div>
<div>If mortgage rates were to rise, of course, then these risks may be multiplied. </div>
<div> </div>
<div>
<p class="p1"><span class="s1">PETE WARGENT is the co-founder of <a href="https://allenwargent.com/" target="_blank"><span class="s2">AllenWargent</span></a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank"><span class="s2">blogger</span></a>.</span></p>
<p class="p2"><span class="s3"><em>His latest book is </em><a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank"><span class="s2"><em>Four Green Houses and a Red Hotel</em></span></a><em>.</em></span></p>
</div>
</div>
</body></html>

APRA reports non-performing loans on the rise

<html><body>
<div>New data from SEQ confirms Brisbane’s residential house and land market performed strongly over 2017.</div>
<div> </div>
<div>Land prices are up more than 11 per cent, the Ray White Special Projects' latest SEQ Vacant Land Market Report indicated.</div>
<div> </div>
<div>It reports 10 major Local Government Areas responding to firming conditions with supply of vacant lots showing a sharp 31.82 per cent rise in Brisbane in the year to December 2017.</div>
<div> </div>
<div>Ray White Commercial head of research Vanessa Rader found a nine per cent spike in lot approvals which shows developers’ expectations of firming future demand.</div>
<div>
<br>Ray White Special Projects Qld executive director Mark Creevey expects to see price growth continue to firm largely in south-east Queensland due to the lack of available land for development and developers focused on owner occupied product.</div>
<div> </div>
<div>“Given there’s been a marginal lift of three per cent in the number of projects from last year it would appear that the significant increase has been derived from established estates delivering further supply to cater for demand,” Mr Creevey said.</div>
<div> </div>
<div>In south east Queensland there were 18,867 lots approved in 2017, down 16 per cent on 2016 but there were 15,691 lots registered which is a 5.97 per cent increase.</div>
<div> </div>
<div>The weighted average vacant land price in south east Queensland lifted 2.37 per cent in 2017 to $262,534.</div>
<div> </div>
<div>Brisbane City Council has the highest jumps from last year with a 9.13 per cent increase in registered lots to 2,894 in 2017 and an 11.35 per cent jump in the median land price to $412,000, with a 435sqm lot being the median size.</div>
<div> </div>
<div>House and land package sales fell 18.44 per cent to 566 sales but prices jumped 6.91 per cent to $735,000, demonstrating the continued requirement for increased supply in the Brisbane region.</div>
<div> </div>
<div>“Sales slipped backwards in 2017 but DA approvals and prices keep rising which bodes well for the future - with a 31.82 per cent spike in lot registrations,” Mr Creevey said.</div>
<div> </div>
<div>Ray White Special Projects Qld executive director Tony Williams said the inability of the LGA to deliver approvals in prime development corridors including Caboolture West, Warner and Morayfield resulted in a dramatic drop in lot approvals by more than 50 per cent.</div>
<div> </div>
<div>“If this is not addressed it could potentially have future supply and price implications,” Mr Williams said.</div>
<div> </div>
<div>“The number of lots registered has shown a solid increase of 32.38 per cent however this increase is from 11 per cent less projects than the previous year, pointing toward diminishing future supply unless key areas are unlocked.</div>
<div> </div>
<div>“The Moreton Bay LGA has demonstrated a flat performance over the past 12 months with the majority of indicators showing a downward trend somewhat defying the market sentiment and demand in this region."</div>
<div> </div>
<div>“The Moreton Bay LGA has traditionally been a popular development corridor offering significant supply across SEQld however has experienced a decline in vacant land settlements (down 4.45 per cent) as well as the median land price which reflects $251,000 (down 1.57 per cent).”</div>
<div> </div>
<div>On the Gold Coast, house and land package sales fell 35.71 per cent to 261 sales in 2017, with the median price rising 3.48 per cent to $505,000. The median lot size is 455sq m with a median vacant land price up 7.54 per cent to $271,000.</div>
<div> </div>
<div>Ray White Special Projects Qld director Matthew Fritzsche said the Gold Coast LGA land market had shown robust results over the last few years.</div>
<div> </div>
<div>“The volume of vacant land sales has however shown significant reductions although it has not dampened the median price across the region. Lot values have seen sizeable gains over the past 12 months after the prior few years had recorded minimal growth which was keeping affordability in check, the decrease in average lot size being a contributing factor,” Mr Fritzsche said.</div>
<div> </div>
<div>“The true growth on a $ per sqm basis has been consistently positive (albeit at a slower rate) and shows encouraging signs for the market. The fall in lot approvals on the back of limited availability of greenfield land is helping push prices upward.</div>
<div> </div>
<div>“Other indicators such as the house and land packages value increase emphasises the ongoing demand for housing in this location, which is expected to remain similar for the rest of 2018.”</div>
<div> </div>
<div>The Ipswich City Council region saw a 3.31 per cent slide in lot registrations, and it’s median vacant land price slipped 3.28 per cent to $191,500. House and land package prices remained steady at $385,000, and the median lot size in Ipswich was 443sq m.</div>
<div> </div>
<div>Mr Creevey anticipates that both values and volumes would remain similar over 2018 as an equilibrium was found between new supply and demand.</div>
<div> </div>
<div>“Demand for land and house and land product in the Ipswich LGA over the 2017 calendar year remained strong with only a slight variance down from 2016 in respect to median values and sales volumes,” Mr Creevey said.</div>
<div> </div>
<div>“The median value for land has reduced slightly we which expect to be a result of increased competition with a number of new estates having commenced in 2017. Volumes remain significantly higher than the longer term 5 and 10 year average.</div>
<div> </div>
<div>“Median values are only 5.69 per cent higher than the 10 year average while the rate per sqm is 20 per cent higher due to diminishing lots sizes which highlights the importance of maintaining affordability as a key selling point in this region.”</div>
<div> </div>
<div>The median lot size in Logan is 421sq m, with a steady median price for vacant of $220,500 with a healthy 5.3 per cent bump in lots registered to 1,690.</div>
<div>Mr Fritzsche anticipated rates of sale to remain strong throughout 2018 with some vacant land price growth.</div>
<div> </div>
<div>“Rates of sale improved by approximately five per cent over this same period and are well up on the long term averages, however value levels remain fairly static. The results for the Logan City LGA show a strong increase in lot approvals over the 12 month period to calendar end 2017,” Mr Fritzsche said.</div>
<div> </div>
<div>“This is a reflection of a number of large master-planned communities coming online in the region, together with a number of smaller more fragmented projects being undertaken by small to medium private developers / builders.”</div>
<div> </div>
<div>Ray White Special Projects Qld Associate Director Andrew Burke said there was a 39 per cent fall in lot approvals to 1662 lots on the Sunshine Coast, while the number of projects rose by 17 per cent to 88.</div>
<div> </div>
<div>The median vacant land price rose 5.69 per cent to $269,500 and the median price of a house and land package rose 4.4 per cent to $522,000.</div>
<div> </div>
<div>“We anticipate further increase in demand in this location due to ongoing business confidence and continued population growth,” Mr Burke said.</div>
<div> </div>
<div>“Infrastructure projects such as the University Hospital, the Sunshine Coast airport expansion, Maroochydore City Centre upgrade and the mooted light rail from Maroochydore to Caloundra (Stage 1 and 2) continue to transition to a highly valuable and sustainable economy. “</div>
</body></html>

j.ballantyne1990-6AQqhLzZaK

SEQ house and land market remains strong

<html><body>
<p>The residential housing market in South East Queensland has experienced stellar growth, with hotspots within the state popping up ahead of the Gold Coast Commonwealth Games, Stage 2 of Gold Coast Light Rail, and the refurbishment of Coomera Town Centre according to Choice Homes.</p>
<p>Areas such as Ipswich, Beaudesert and Logan are coming on strong, according to their latest Urban Appeal report.</p>
<p>Troy Knight, company director, Choice Homes, said the Ipswich market is warming up and there’s plenty of data to prove it.</p>
<p>“The city has one of the fastest growing populations in Australia, increasing by 700 percent in the last decade," he said</p>
<p>“The region is hugely popular with families due to its retail and family amenities, local employment opportunities and great educational and transport infrastructure.</p>
<p>“The Queensland Government has earmarked Ipswich and its surrounding suburbs as a major growth corridor.</p>
<p>“Private and government investment in the area, including the hotly anticipated $200 million upgrade of the Ipswich motorway, RAAF Amberley base, $190 million railway maintenance centre and $1 billion Ipswich CBD revitalisation program, is further driving demand.</p>
<p>“A vast array of new roads, transport links and accessible residential communities are starting an important new chapter in the development of Queensland’s fastest-growing city.</p>
<p>“These infrastructure initiatives, also a catalyst for job creation and commercial development, will add value to property in the surrounding areas.”</p>
<p>The report notes Beaudesert will continue to grow and attract more people in the area with low vacancy rates, affordable housing and easy access to the metropolitan areas of the Gold Coast and Brisbane.</p>
<p>It said local population is forecast by the Scenic Rim Council to triple by 2036 as the region emerges as a significant satellite of Brisbane and the Gold Coast, both less than an hour away.</p>
<p>“Much of the city’s growth is underpinned by the Bromelton State Development Area, a 15,000ha area less than 6km from Beaudesert,” the report said.</p>
<p>“Included in the SDA is the Bromelton State Industrial Park, an 1,800ha parcel that will deliver an estimated 18,000 new jobs to the region.”</p>
<p>Troy Knight said Logan, situated between Brisbane to the north and Gold Coast to the south, is ideally placed for continued growth due to its central geographical location and available young workforce.</p>
<p>“The Logan area is about to embark on a major growth phase due to land availability,” he said.</p>
<p>“Median rental yields are showing market momentum, with 6.3 percent returns for houses.</p>
<p>“High-level growth is a result of affordable properties with above-average rental yields, widespread transport links, a diverse mix of industries providing employment and a growing economy.</p>
<p>“Many of the city’s older suburbs have been revitalised through urban renewal projects, with a new emphasis on social elements – such as dining, entertainment, recreation and cultural diversity – rounding out the city’s new image.”</p>
<p>For more information from Choice Homes, <a href="https://www.propertyobserver.com.au/https://www.choicehomes.com.au/communitydetails/5700433" target="_blank">click here</a>.</p>
</body></html>

jonathanchancellor-7SQnKwU6yx

Hotspots in South East Queensland residential property market

<html><body>
<p>GUEST OBSERVER</p>
<p>The Eastern seaboard markets have performed counter-cyclically to growth in wages and GDP, both of which are trending below the historical average.</p>
<p>When wages are low but growth in housing is high, the credit used to fund this growth in housing is found elsewhere.</p>
<p>Reportedly, an increased number of Australians coming into retirement have used money in a Self-Managed Super Fund (SMSF) to take out a loan for property. The new normal of low economic growth and low yields from most assets makes east-coast property an economic anomaly.</p>
<p class="Body1">Graph 3 shows the latest data from the Australian Taxation Office on SMSFs. The graph plots the number of SMSFs and the asset allocation to property, at each quarter over the last 5 years.</p>
<p><span><strong>Graph 3: Percentage of Real Estate Assets in SMSFs vs No. SMSFs</strong></span></p>
<p><a href="/images/2016/08/04/Graph_3.jpg" target="_blank"><span><strong>Click to enlarge</strong></span></a></p>
<p><img src="/images/2016/08/04/Graph_3.jpg" alt=""></p>
<p><em><span>Source: ATO, SMSF Statistical Report September 2015</span></em></p>
<p>Without a longer time series, it is difficult to say whether residential property has made up an increasing percentage of retirement portfolios. However, the increase of SMSFs with a fairly consistent rate of allocation to residential real estate suggests this could be one source of growth in the Australian housing market.</p>
<p>From the March to September quarter of 2015, there was an increase of allocation to residential property from SMSFs, of 0.43 percent. This was a time when the Sydney market was coming into its peak growth rates for this cycle.</p>
<p>Interestingly, the same period saw a higher increase in the share of commercial property that composed SMSFs assets. This could be because the ATO sometimes permits the purchase of business premises for fund members to operate in. Commercial property also presents a favourable tax environment, with a capital gains tax of just 10 percent if the property is held for over 12 months.</p>
<p>These trends are important to note as they highlight the sources of demand outside of Australian wages and employment. When there are multiple sources of demand flowing into a locally supplied market, property prices could be affected by the current regulatory uncertainty around superannuation.</p>
<p>It is also important to note that the oldest baby boomers in Australia are now at retirement age. The property purchased through SMSFs will one day need to be liquidated in order to supplement pension income and address extremely high health and aged care costs. If a large number of stock is to be liquidated at once, this could erode some value in the properties owned by retirees, unless offset by an increased population.</p>
<p>Eliza Owen, is market analyst for Onthehouse.com.au and can be contacted <a href="https://www.onthehouse.com.au/" target="_blank">here</a>.</p>
</body></html>

jchancellor-FAypfDUnLy

Housing and an ageing population: Eliza Owen

<html><body>
<p>A sharp fall in household wealth is likely to have a severe negative effect on consumer sentiment and household balance sheets, implying less household consumption at a time when Australia’s economy is precariously balanced and aiming for a pickup in consumer spending according to CoreLogic RP Data head of research Tim Lawless.</p>
<p>In his May housing market report, he said with 52 percent of household wealth held in residential land and housing a better way to improve affordability is to provide better value in the housing market, without trying to orchestrate a crash in existing home values.</p>
<p>He referenced a report on the ABC television program 4 corners that said for housing affordability to improve, house prices had to come down and added a crash in housing prices is one way to improve affordability, but a crash in asset values involves more than just a substantial drop in the price of a home.  </p>
<p>"The economic consequences of a major fall in home values would be far reaching and long lasting; remember the Global Financial Crisis started with a crash in the US housing market," he said.</p>
<p>"Lower consumer sentiment would likely see households become more conservative with a preference for saving rather than spending, which in turn, would place a drag on economic growth. </p>
<p>"Given that Australian banks have a large exposure to residential property, an economic slowdown could see the banking sector impacted by rising arrears and default rates. Higher rates of negative equity would place the banking sector under pressure, push loan to valuation ratios into unhealthy territory and lead to tighter lending conditions for all borrowers.  </p>
<p>"Take Sydney as a key example; on our latest data there are 66 suburbs across Sydney that have a median house value under $500,000 (8.5% of all suburbs) and eight suburbs where the median house value is under $400,000. The problem is that these suburbs are mostly located in areas that are either hard to get to and from, they may lack essential amenities such as shopping facilities and health care, or they suffer from low socio-economic conditions (or mixture of all three). "</p>
<p>He added that providing more efficient and affordable transport linkages that connect these areas to the major working and social centres would be a good first step towards making these regions more desirable and opening up demand for these affordable areas.</p>
<p>"Of course, large infrastructure projects are expensive, but after the stamp duty windfall the NSW state government has seen over the past four years, it makes sense this money would be reinvested back into the state. Major infrastructure projects are also stimulatory in the sense that they create jobs and provide a foundation for stronger economic growth," he said.</p>
<p>"Another step in the right direction would be improving local zoning regulations to allow for smaller lot sizes. Once again, focussing on Sydney, where the affordability challenges are the most pressing, the size of newly developed blocks of land remains substantially higher than most other capital cities. Based on land sales over the past year, the median block area was 515sqm which is larger than every other capital city except Hobart and Darwin.  </p>
<p>"Considering the land value is the largest factor in the price of a new house, reducing the block size could provide enormous affordability dividends. Based on the median rate per square metre of land, a 100sqm reduction the typical block size should reduce the typical land cost by nearly $80,000.</p>
<p>"There are plenty of other strategies, including smarter home designs that allow for smaller floor plates but maximize the amount of usable space, reducing the tax burden on buyers and reducing development charges for developers.</p>
<p>"I haven’t even touched on the affordability associated with higher density living, ramping up infill targets within established areas to ensure existing transport infrastructure is leveraged to the greatest extent. Nor have I discussed making regional markets, which are generally very affordable compared with the capital cities, more attractive for businesses to locate there which will attract jobs and inter-city/inter-state migrants."</p>
</body></html>

Fall in household wealth will hit consumer sentiment severely: CoreLogic RP Data's Tim Lawless

<html><body><div class="page" title="Page 1">
<div class="layoutArea">
<div class="column">
<p><span>GUEST OBSERVER</span></p>
<p><span>Proposals by the NSW government to make it harder for foreign investors to buy housing will only slow down housing supply. </span></p>
<p><span>The proposals by NS</span><span>W Treasury to impose a 1.5 percent surcharge on land tax on foreign investors in housing will be </span><span>a disincentive to invest in NSW.</span></p>
<p><span>It </span><span>seems that the aim is to match the surcharge in Victoria which will remove the point of </span><span>difference that NSW has.</span></p>
<p><span>The Sydney region needs 33,200 new homes a year according to the Department of Planning </span><span>but last financial year only 27,348 were built leaving a shortfall of nearly 6,000 homes. We must do all we can to boost housing supply and foreign investors have been contributing to this particularly through new apartments. To send a message that these investments are not wanted </span><span>in NSW can only reduce the flow of capital into new housing.</span></p>
<p><span>Foreign investors often help make development pro</span><span>jects become feasible by underpinning the </span><span>pre sales with up to 15% of purchases and this helps local purchasers buy into a viable project.</span></p>
<p><span>The argument for the surcharge seems to be to free up more housing for first home buyers by </span><span>reducing the number of purchasers but this can only lead to less new homes being built. With an undersupply already pushing prices up a further reduction in supply is likely to only increase home </span><span>prices.</span></p>
<p><span>There has been a slow</span><span>-down in housing approvals in NSW over the last 6 to 8 months and an additional tax on foreign investment in housing will only lead to a further slow-down. Already Sydney has the council amalgamations causing some concerns over planning and discussion about adding value capture levies to new development beginning to affect confidence in the </span><span>market so the possible extra levy on foreign investment will further erode industry confidence.</span></p>
<p><span><em>Chris Johnson is chief executive officer of property development industry group Urban Taskforce and can be contacted <a href="https://www.urbantaskforce.com.au/index.php?option=com_content&amp;view=article&amp;id=97&amp;Itemid=126#.Vdaart55dFI" target="_blank">here</a>.</em></span></p>
</div>
</div>
</div></body></html>

Foreign investment in housing helps with much needed supply: Urban Taskforce

<html><body><div title="Page 39">
<p>The fringe suburbs of Warrnambool in Victoria consist of North Warrnambool, Dennington and the Gateway Road subdivisions.</p>
<p>These locations provide an affordable housing option for low to middle income earners as well as good entry level investments, according to valuation firm Herron Todd White's latest property clock, April 2016, a simple broad brush means to indicate where property prices are and where they are headed to.</p>
<p>Warrnambool was at the start of the recovery market for houses, while for units it was at the bottom of the market, according to HTW.</p>
<p>The majority of Warrnambool's fringe suburbs consists of recently built, brick veneer dwellings with house and land packages starting from $320,000 and established dwellings averaging approximately $370,000.</p>
<p>These suburbs are providing good rent returns for investors, with rents ranging from $350 to $450 per week based on the size and age of the dwelling. Agents advise that tenants are preferring these suburbs, which provide newly constructed properties with at least three-bedrooms and two-bathrooms, to those closer to the CBD with older dwellings with a single bathroom.</p>
<p>North Warrnambool appears to be the suburb performing best which can be attributed to the recently completed infrastructure and access routes to the CBD. Long term you would expect a higher capital growth closer to the CBD but these suburbs appear to be able to maintain good rental levels and relatively good affordability. </p>
<p>Property Observer found a recently sold home in Warrnambool's fringe suburb of Dennington around the average prices mentioned by HTW.</p>
<p>A three-bedroom house at <a href="https://www.realestate.com.au/property-house-vic-dennington-119752087" target="_blank">45 Adriana Crescent Dennington Vic 3280</a> for $345,000, according to RP Data.</p>
<p> </p>
<p> </p>
</div></body></html>

Residential Housing

Editor's Picks

Have something to contribute?

Developments

New apartments

New townhouses

News

Residential Housing

Editor's Picks

Receive the latest news stories to your inbox

Have something to contribute?

Developments

New apartments

New townhouses

News