<p>Longstanding Gold Coast and Canberra developer <a href="https://www.apartments.com.au/developers/morris-property-group">Morris Property Group</a> is continuing to roll on with its Glitter Strip apartment pipeline, seeking to return to Mermaid Beach with a new 68-apartment development.</p>

<p>Morris, founded by Barry Morris in 1978 and one of the Gold Coast’s most prolific apartment developers over the past two decades, has filed plans for a 12-storey mixed-use building at <a href="https://www.apartments.com.au/new-apartments/36-seabeach-avenue-mermaid-beach-qld-4218">34-36 Seabeach Avenue</a>, on the prized eastern side of the Gold Coast Highway.</p>

<p>The 1,227 sqm site occupies a prominent corner position at Seabeach Avenue and the Gold Coast Highway, opposite the Mermaid Plaza retail and office precinct and around 140 metres walking distance from the future Mermaid Beach South light rail station.</p>

<p><a href="https://www.apartments.com.au/architects/fraser-partners-0">Fraser &amp; Partners</a> has designed the project, which will comprise 68 apartments across a mix of 48 two-bedroom and 20 three-bedroom residences.</p>

<p>The building will rise 12 storeys, reaching a maximum height of 36 metres, with the apartments accounting for a total of 156 bedrooms. The development application also seeks approval for short-term accommodation across the 68 apartments, while two office tenancies are proposed at ground level.</p>

<p>The plans show 108 car spaces across the development, with parking accommodated at ground level and within a three-level basement accessed from Seabeach Avenue.</p>

<p><img alt="Seabeach Avenue and the Gold Coast Highway" data-entity-type="file" data-entity-uuid="c2175c99-12fd-4a3c-9be1-89bbf258a90d" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-20%20at%202.59.41%E2%80%AFPM_0.png?VersionId=iNLzWcE6gaAE76rafhEXfHve.4g4Se0p" /></p>

<p>Resident amenity will be concentrated on level two, where Fraser &amp; Partners has designed a recreation deck with a swimming pool, 90 sqm pool terrace, outdoor barbecue area and gym.</p>

<p>The broader communal offering will also incorporate landscaped spaces, with the planning documents noting the amenity has been designed to provide areas for recreation, social interaction and outdoor living.</p>

<p>The proposal would continue the transformation of the Gold Coast Highway corridor through Mermaid Beach ahead of the arrival of the light rail.</p>

<p>The site is zoned Neighbourhood Centre and sits within the Mermaid Beach/Broadbeach Light Rail Corridor neighbourhood plan. While the prescribed building height is 24 metres, the site is identified within an Urban Neighbourhood context providing for a 50 per cent height uplift to 36 metres.</p>

<p>Planning documents describe the stretch of the Gold Coast Highway between Broadbeach and Nobby Beach as increasingly characterised by medium and high-rise development, with the proposed Morris tower joining projects including Ventura, The Alfred, Oceans and Otto.</p>

<p><img alt="Seabeach Avenue and the Gold Coast Highway" data-entity-type="file" data-entity-uuid="911f193f-e381-4a55-be08-58be87fcf978" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-20%20at%202.59.48%E2%80%AFPM.png?VersionId=oxVvLJaY.SOXEdXrIcogfyEXDfvCmmpM" /></p>

<p>The development would mark Morris Property Group's latest investment in Mermaid Beach, where it has already delivered two apartment projects.</p>

<p>Otto, at 1 Bondi Avenue on the western side of the Gold Coast Highway, comprises 70 apartments across nine storeys. The project was completed in 2019 and includes a residents' gym, recreation deck and swimming pool.</p>

<p>Morris also developed Oceans at 46 Ocean Street, a nine-storey, 70-apartment build-to-rent development completed in 2019. Oceans was the group's first build-to-rent project and incorporates commercial space at ground level.</p>

<p>The two existing Morris projects sit further north along the same Gold Coast Highway corridor as the proposed Seabeach Avenue development. Fraser &amp; Partners' planning analysis specifically identifies both Otto and Oceans among the established built-form precedents surrounding the site.</p>

<p><img alt="Seabeach Avenue and the Gold Coast Highway" data-entity-type="file" data-entity-uuid="14925119-7b71-4812-8149-340317512c7c" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-20%20at%203.00.15%E2%80%AFPM.png?VersionId=aEJqYuw_nTCjcin17BSD0piB1EFotTlj" /></p>

<p>Mermaid Beach represents only part of Morris' considerable Gold Coast footprint.</p>

<p>The family-owned developer has been particularly active in neighbouring Broadbeach, delivering projects including Sierra Grand, Eclipse, Synergy, Qube, Koko, Opus and Malo, while its current pipeline includes Maison and the two-tower Crest development.</p>

<p>Further south, Morris has also developed a string of projects in Burleigh Heads, including Element, Boardwalk and Sandbar, while Essentia expanded its footprint north into Surfers Paradise.</p>

<p>The Seabeach Avenue application has been lodged by PMM Broadbeach Pty Ltd and seeks a development permit for a Material Change of Use for multiple dwellings, short-term accommodation and office uses. Zone Planning Group prepared the planning application, with Fraser &amp; Partners commissioned as architect.</p>

<p>The project comes as the developer continues to expand its Gold Coast pipeline while retaining a significant presence in Canberra. Morris now has more than $2.5 billion of development in its national pipeline and has delivered more than 7,000 homes during its near five-decade history</p>


Joel Robinson

First look: Morris Property Group returns to Mermaid Beach with new Seabeach Avenue apartment development

<p><a data-saferedirecturl="https://www.google.com/url?q=https://www.apartments.com.au/developers/fortis&amp;source=gmail&amp;ust=1787272340808000&amp;usg=AOvVaw3hvFB2uWTRfEyEcpTSnnK9" href="https://www.apartments.com.au/developers/fortis" target="_blank">Fortis</a>&nbsp;is continuing its stronghold on Sydn​ey’s eastern suburbs apartment market, launching&nbsp;in September&nbsp;its latest boutique&nbsp;<a data-saferedirecturl="https://www.google.com/url?q=https://www.apartments.com.au/developments/double-bay-nsw-2028&amp;source=gmail&amp;ust=1787272340808000&amp;usg=AOvVaw0GI5S9-wNeiLUnM-d1uYkw" href="https://www.apartments.com.au/developments/double-bay-nsw-2028" target="_blank">Double Bay</a>&nbsp;development,&nbsp;<a data-saferedirecturl="https://www.google.com/url?q=https://www.apartments.com.au/new-apartments/55-william-double-bay-55-william-street-double-bay-nsw-2028&amp;source=gmail&amp;ust=1787272340808000&amp;usg=AOvVaw2YNouJQcFjiTTgVHbgDLA-" href="https://www.apartments.com.au/new-apartments/55-william-double-bay-55-william-street-double-bay-nsw-2028" target="_blank">55 William</a>.</p>

<p>55 William presents&nbsp;just eight north-facing&nbsp;two-bedroom, three-bedroom and full-floor&nbsp;residences to the market, priced from $4.5 million.</p>

<p>The upcoming launch comes just weeks after Fortis secured approval for the $80 million development, its third eastern suburbs approval in two months. Construction is already underway, with completion targeted for 2028.</p>

<p>[smartcode_project:default project_id=152579 project_image_fid=376250]</p>

<p>55 William adds to a growing concentration of Fortis projects in and around Double Bay, a market the developer has become increasingly active in over recent years.</p>

<p>Fortis previously completed the nine-residence Marmont on New South Head Road, while it is currently developing a mixed-use residential and retail project at 12 Cross Street. Its wider Double Bay footprint also extends into commercial and retail development.</p>

<p>The developer's broader Sydney residential pipeline is particularly concentrated across the eastern suburbs, with projects spanning Doub​le Bay, Ro​se Bay, Wo​ollahra, Dar​ling Point, Poi​nt Piper and Eli​zabeth Bay.</p>

<p>[smartcode_project:default project_id=152579 project_image_fid=376253]</p>

<p>At 55 William, Fortis has again turned to MHN Design Union, the architecture practice behind several of its eastern suburbs projects, while London-based 1508 London has been appointed to handle the interiors and Wyer &amp; Co the landscaping.</p>

<p>The six-level building will comprise a combination of two and three-bedroom apartments, including a garden residence, full-floor apartments, a sub-penthouse and penthouse. Each residence will have secure basement parking and private outdoor space.</p>

<p>A rooftop terrace for all residents, along with select apartments, enjoys views across Double Bay Harbour and toward the Sydney skyline.</p>

<p>Ceiling heights will reach up to three metres&nbsp;in select residences, while the kitchens will feature natural stone and integrated Gaggenau appliances.</p>

<p>&nbsp;</p>

<p>&nbsp;</p>

<p>The boutique nature of the project reflects the type of stock Fortis has increasingly targeted across Sydney's eastern suburbs, where larger apartments and smaller buildings are being pitched primarily toward local owner-occupiers and downsizers.</p>

<p>Fortis Group General Manager Ed Eve said the developer continues to see demand from buyers wanting to remain in the eastern suburbs but move into newer, lower-maintenance housing.</p>

<p>“We're seeing continued demand from local owner-occupiers and downsizers looking for high-quality homes that allow them to remain in the eastern suburbs, close to the lifestyle and community they know,” Eve said.</p>

<p>55 William is also one of the early projects to respond directly to the NSW Government's Low and Mid-Rise Housing reforms. Fortis had previously secured approval for just two townhouses on the 599 sqm site before revising the scheme to eight apartments following the planning changes.</p>

<p style="text-align:start">Situated one street back from Double Bay's water's edge, the project enjoys an enviable harbourside setting within walking distance of Double Bay Village and the ferry wharf.</p>

<p>[smartcode_project:default project_id=152579 project_image_fid=376252]</p>

<p>Fortis has increasingly made the eastern suburbs a major focus of its Sydney pipeline. Beyond Double Bay, it recently completed the 14-residence Piper in Point Piper and has projects underway or planned across Rose Bay, Woollahra and Darling Point.</p>

<p>The developer recently secured approval for Verano in Rose Bay, a six-level development comprising 21 two, three and four-bedroom apartments, also designed by MHNDU.</p>

<p>55 William&nbsp;is soon to be release to the market with VIP appointments commencing early September,&nbsp;with residences priced from $4.5 million.</p>

<p>[smartcode_project_cta:default project_id=152579]</p>


Fortis continues eastern suburbs push with 55 William launch

<p>UAE-based developer Arada has unveiled plans for a $2 billion twin-tower apartment development in Broadbeach, marking its first move into Queensland as it continues its rapid expansion across Australia.</p>

<p>Arada will develop 952 apartments across two towers on a prominent site opposite the Gold Coast Convention and Exhibition Centre, with the project targeted for completion ahead of the Brisbane 2032 Olympic and Paralympic Games.</p>

<p>The project represents Arada's largest commitment to the Australian market since arriving in the country in 2024 and significantly expands a local pipeline that has now grown to eight projects and more than 5,000 homes.</p>

<p>It will also be the first major Queensland project delivered by Roberts Co since the tier-one contractor was acquired by Arada Group in 2025.</p>

<p>Plus Studio has designed the Broadbeach development, which will comprise one, two and three-bedroom apartments across two towers connected by a landscaped podium.</p>

<p>A significant resident amenity offering will include lagoon and lap pools, a gym, sauna and steam room, alongside a mist room, infrared room and salt scrub facilities. Communal terraces, private dining areas, a library, residents' lounge and work-from-home spaces are also planned. Around 1,200 sqm of retail and hospitality space will occupy the ground floor.</p>

<p>The site puts Arada in one of the Gold Coast's most active apartment markets, directly opposite the convention centre and within walking distance of Pacific Fair, The Star Gold Coast and Broadbeach's dining and retail precinct.</p>

<p>It also has immediate access to the Gold Coast light rail network and sits just a few blocks from the beach.</p>

<p>Arada Group Chief Executive Ahmed Alkhoshaibi said Broadbeach represented an opportunity for the developer to expand beyond its initial NSW pipeline.</p>

<p>“Broadbeach is a world-class address that gives us the canvas to create a community of exceptional design and lifestyle quality that genuinely enriches the daily lives of the people who call it home,” Alkhoshaibi said.</p>

<p>“This is our first development outside New South Wales, and it reflects our growing ambition to grow in key urban markets around the country.”</p>

<p>Alkhoshaibi said bringing Roberts Co into the project would give Arada greater control over the development and construction process.</p>

<p>“Delivering this project through Roberts Co, our own tier-one construction business, means we can bring the quality, pace and accountability that our buyers expect.”</p>

<p>The move into Broadbeach comes as Arada accelerates its Australian expansion following its entry into the market two years ago. The developer has assembled a pipeline of eight projects comprising more than 5,000 homes, while the acquisition of Roberts Co last year gave the group its own Australian construction capability.</p>

<p>Globally, Arada has a development portfolio valued at $50 billion comprising more than 55,000 homes across the UAE, United Kingdom and Australia.</p>

<p>The Gold Coast is emerging as the next major market for the developer, with strong population growth and infrastructure spending ahead of the 2032 Games continuing to underpin significant apartment development across the coastal strip.</p>


Arada plots $2 billion Broadbeach towers in major Queensland move

<p>Sydney’s downsizer market is changing, with a growing cohort of buyers prioritising the right home over simply finding a smaller one.</p>

<p>Coronation Property Head of Sales Cam Porter says the traditional idea of downsizing does not necessarily reflect what many buyers are now looking for, particularly those moving from established family homes across Sydney.</p>

<p>Instead, he says they are increasingly becoming “right-sizers”, seeking lower-maintenance homes without sacrificing the space, amenity or quality they have become accustomed to.</p>

<p>“We are increasingly seeing buyers who are not motivated by the idea of simply moving into a smaller property,” Porter says.</p>

<p>“They are right-sizers. They want a home that is easier to manage and better connected, but they still expect generosity, quality and a floorplan that supports the way they live.”</p>

<p>It is a subtle but important distinction in a market where apartment developers are increasingly targeting established owner-occupiers.</p>

<p>[smartcode_project:default project_id=135149 project_image_fid=377495]</p>

<p>For many of these buyers, moving from a house to an apartment is not driven by a desire to dramatically reduce their living space. Instead, the appeal is in removing some of the maintenance associated with a larger home while retaining generous living areas, storage and enough flexibility to accommodate family and friends.</p>

<p>Coronation’s sales team is seeing buyers place particular importance on natural light, practical storage and additional rooms that can be used as guest bedrooms, home offices or secondary living spaces.</p>

<p>Kitchens and dining areas are also playing an increasingly important role, particularly for buyers who regularly entertain or have children and grandchildren visit.</p>

<p>[smartcode_project:default project_id=135149 project_image_fid=377494]</p>

<p>“These buyers still want their home to feel generous,” Porter says.</p>

<p>“They may want less maintenance, but they are not looking for less life.”</p>

<p>The challenge for the broader housing market is providing enough of the right stock to encourage that move.</p>

<p>While much of the discussion around Sydney’s housing shortage has centred on the number of homes being delivered, Porter says the diversity of those homes is equally important.</p>

<p>Older homeowners can remain in large family houses for longer when they cannot find an appropriate alternative in the neighbourhoods where they have built their lives.</p>

<p>“The decision is rarely as simple as wanting fewer bedrooms,” Porter says.</p>

<p>“People are weighing up their connection to a neighbourhood, the space they need for family, the quality of the home and whether it will continue to work for them over the long term.”</p>

<p>It also has implications beyond the downsizer market. Providing suitable apartments for smaller households can free up established houses for families who need the additional bedrooms and land, creating greater movement through the housing market.</p>

<h2>Lillian targets the next stage of apartment buyer</h2>

<p>It is a buyer Coronation is targeting at <a href="https://www.apartments.com.au/new-apartments/lillian-erskineville-9-metters-street-erskineville-nsw-2043">Lillian</a>, its new collection of apartments, terraces and penthouses at Erskineville Village.</p>

<p>Designed by Silvester Fuller, Lillian has been shaped around larger living spaces, natural light and flexible floorplans, alongside landscaped areas, wellness amenity and communal spaces for residents.</p>

<p>The development will form part of Coronation’s broader Erskineville Village precinct, which will combine new homes with green space, retail, hospitality and new pedestrian connections.</p>

<p>[smartcode_project:default project_id=135149 project_image_fid=377688]</p>

<p>McPherson Park will sit at the centre of the precinct, creating a significant new green space alongside the project’s retail and hospitality offering.</p>

<p>For Porter, the opportunity is to give buyers another housing option without forcing them to leave the part of Sydney they already know.</p>

<p>“People should be able to change the type of home they live in without having to change their entire life,” he says.</p>

<p>“For many buyers, Lillian offers the opportunity to remain connected to the Inner West and the city, while gaining access to a more convenient, walkable and considered way of living.”</p>

<p>[smartcode_project:default project_id=135149 project_image_fid=377687]</p>

<p>Coronation will explore the changing <a href="https://lillianresidences.com.au/news/lillian-x-space-x-downsizers-event-27-august/">right-sizer market at an event on August 27</a>, bringing together experts across property, design and lifestyle.</p>

<p>Held in partnership with SPACE, Poliform and Downsizer.com.au, the event will include a property market outlook from economist Michael Blythe alongside discussion around the considerations facing buyers planning their next move.</p>

<p>Attendees will also be able to learn more about the residences and amenity planned at Lillian Erskineville.</p>

<p>[smartcode_project_cta:default project_id=135149]</p>


From downsizing to right-sizing: What Sydney buyers want from their next home

<p>Family-owned builder and developer <a href="https://www.apartments.com.au/developers/omaya">Omaya</a> is bringing its 27-storey The Maybelle development to market, with the 229-apartment tower rising alongside Ismay Reserve near North Strathfield.</p>

<p><a href="https://www.apartments.com.au/new-apartments/the-maybelle-21-parramatta-road-homebush-nsw-2140">The Maybelle</a> will comprise one, two and three-bedroom apartments, with its height providing elevated outlooks towards the Sydney skyline and Harbour Bridge, while other residences will look across neighbouring Ismay Reserve.</p>

<p>Designed by <a href="https://www.apartments.com.au/architects/squillace-architects">Squillace Architects</a>, the tower combines its parkside setting with proximity to the established retail, dining and transport amenity around North Strathfield.</p>

<p>[smartcode_project:default project_id=134873 project_image_fid=376196]</p>

<p>Residences will feature open-plan living spaces and a choice of two interior schemes, while communal amenity is spread across two elevated levels of the building.</p>

<p>Level 8 will be home to the Garden Pavilion, a full-floor resident space incorporating communal entertaining and breakout areas, seating and recreation spaces. Further up the tower, a landscaped Sky Terrace on Level 14 will provide another communal area with panoramic views towards the Harbour Bridge and Sydney skyline.</p>

<p>At ground level, the development sits directly alongside Ismay Reserve, where lawns, walking paths, children's play areas, picnic spaces and recreational facilities extend the green space available immediately around the project.</p>

<p>[smartcode_project:default project_id=134873 project_image_fid=376194]</p>

<p>The Maybelle is also within walking distance of North Strathfield and the Bakehouse Quarter, which provides a mix of cafés, restaurants, shops and everyday services.</p>

<p>Existing rail and bus services provide connections across Sydney, while the future North Strathfield Metro and access to the M4 will add to the transport options available around the precinct. Walking and cycling routes also extend via Powells Creek towards Sydney Olympic Park and its sporting, entertainment and parkland precincts.</p>

<p>Families are also well positioned for access to a broad selection of established schools and education options across Strathfield and the surrounding Inner West.</p>

<p>[smartcode_project:default project_id=134873 project_image_fid=376181]</p>

<p>Omaya has operated in Sydney for more than 35 years, managing projects from acquisition and design through to construction and delivery. The family-owned company is both developer and builder of The Maybelle.</p>

<p>Apartments start from $560,000, with the development protected by 10-year Latent Defects Insurance.</p>

<p>Construction is well underway, with completion expected by the end of 2026 and move-in anticipated from Q1 2027.</p>

<p>[smartcode_project_cta:default project_id=134873]</p>


The Maybelle brings 27-storey parkside tower to market near North Strathfield

Residential Market

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<p>I’ve always liked the saying “It isn’t difficult to make a mountain out of a molehill – just add dirt.”</p>
<p>The focus on clearance rates by some commentators is plain ridiculous especially when they insert the word “Sydney” into the clearance rate debate.</p>
<p>As we all know Sydney is made up of some 700 suburbs – where some are still performing above expectations and some are caught in a downward spiral. This is not an historic first as we have seen this pattern on many occasions previously with the areas of western Sydney, north – west Sydney, Canterbury Bankstown and surrounding areas the hardest hit.</p>
<p>These areas coincidentally have been the engine room for the Sydney property boom so they were always going to break – down. This is not a collapse rather a correction.</p>
<p>If you take the areas within a 5 to 10 kilometre radius of the Sydney CBD they are still performing with gusto<a href="https://www.rwm.com.au/news/" target="_blank">.</a> Although it should also be noted that quite a few properties are withdrawn from public auction which go unreported. Properties that are passed in and sold an hour or two later are reported as sold – at – auction.</p>
<p>When I do a Domain search for properties in Greater Sydney that are on the market I see all up there are presently 12,922 properties, which isn’t a lot on the grand scale of things. The estimated Sydney population in 2015 is 4,840,000. What is interesting is that approximately one – third of these properties would be set down for public auction. So why the focus on clearance rates?</p>
<p>What I find even more interesting is why all the properties are bundled together? Well that’s easy to explain as most of the commentators are connected to some media organisations in some shape or form. If they were to list areas where clearance rates are identifying a nose – dive then nobody would advertise in those local newspapers, so it’s commentary by self-preservation.</p>
<p>Yes the call for concern is well justified with Sydney posting an annual growth of 12.8% and Melbourne even higher at 15.6%. To put this into some sort of perspective Auckland is presently running away at 27% annual capital growth – which is scary.</p>
<p>There are two game – breakers in property markets; interest rates and unemployment. The Australian Bureau of Statistics have just released its labour force survey for October which recorded that the seasonally – adjusted unemployment rate fell to 5.9%, down 0.3 points from September. We live in a funny society where some sections were desperately hoping that the unemployment figure would rise.</p>
<p>Now the interest rate scenario is even more interesting as we need to take into account that the Sydney property market has experienced a massive change to its normal landscape. We need to factor in the new significant buyer – investors. They have been driving the markets to levels never seen before, so we need to pay particular attention to yields.</p>
<p>Sydney 12 months ago was recording 3.7 per cent, today it has dropped back to 3.3%. Melbourne 12 months ago was 3.3%, today it is 3.0%. Brisbane 12 months ago was 4.5%, today it’s 4.4%. Adelaide has seen no change and sits at 4.2% and Perth has gone from 4.1% to 4.0%. (Source: Core Logic RP Data)</p>
<p>From these figures the two biggest investor markets, Sydney and Melbourne, are not surprisingly recording the highest downward corrections. Yields in 2016 will command special interest especially in the Sydney and Melbourne property markets. The cash rate debate is anyone’s guess where if the Reserve Bank of Australia decided to cut the cash rate there are absolutely no guarantees that the banks will pass that cut on after their last decision to increase interest rates.</p>
<p>Yes I have no doubt that we will see some interesting corrections in 2016 where I predict the areas that have experienced massive infrastructure expenditure to suffer the most. This is not anything new as it’s happened plenty of times previously, although some areas of Sydney have not seen any infrastructure expenditure in over fifty years. Take the northern beaches for example where their last significant expenditure was that dumb Spit Bridge in 1959.</p>
<p>If one was to sit back and collate all the stamp duty paid from Palm Beach to Seaforth over the last 56 years you would come up with a near nil return for infrastructure expenditure. Still the state government insists on thousands and thousands more high density housing developments with no proposals to build new transport plans aside from double – decker buses.</p>
<p>Maybe stamp duty rates should be determined by infrastructure expenditure within a particular region?</p>
<h4>MOSMAN – 2088</h4>
<p>• Number of houses on the market this time last year – 114</p>
<p>• Number of houses on the market last week – 75</p>
<p>• Number of houses on the market this week – 74</p>
<p>• Number of apartments on the market this time last year – 76</p>
<p>• Number of apartments on the market last week – 60</p>
<p>• Number of apartments on the market this week – 61</p>
<h4>CREMORNE – 2090</h4>
<p>• Number of houses on the market this time last year – 13</p>
<p>• Number of houses on the market last week – 12</p>
<p>• Number of houses on the market this week – 13</p>
<p>• Number of apartments on the market this time last year – 36</p>
<p>• Number of apartments on the market last week – 17</p>
<p>• Number of apartments on the market this week – 16</p>
<h4>NEUTRAL BAY – 2089</h4>
<p>• Number of houses on the market this time last year – 10</p>
<p>• Number of houses on the market last week – 6</p>
<p>•Number of houses on the market this week – 5</p>
<p>• Number of apartments on the market this time last year– 34</p>
<p>• Number of apartments on the market last week – 30</p>
<p>*Number of apartments on the market this week – 36</p>
<p> </p>
<p><span> </span><em><span>ROBERT SIMEON</span> is a director of </em><em><a href="https://www.rwm.com.au/" target="_blank" title="RWM" rel="nofollow">Richardson Wrench Mosman and Neutral Bay</a> </em><em>and has been selling residential real estate in Sydney since 1985. <br>He has also been writing real estate blog </em><em><a href="https://www.rwm.com.au/news/" target="_blank" title="Virtual Realty News" rel="nofollow">Virtual Realty News</a> </em><em>since 2000. </em></p>
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robertsimeon-hRNTwJyXkQ

Why clearance rates aren’t clear: Robert Simeon

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<div>At the headline level it was another spirited month for housing finance nationally, with the seasonally adjusted $32.6 billion in October being the sixth greatest month on record following a lending blitz through 2015.</div>
<div> </div>
<div>Although owner-occupier commitments increased again in the month, investor finance continued to slump, dropping by 6.1%.</div>
<div> </div>
<div><a href="/images/2015/12/9/HF1.jpg" target="_blank">Click to enlarge</a></div>
<div><img src="/images/2015/12/9/HF1.jpg" alt=""></div>
<div> </div>
<div>
<div>The devil of this data series forever lies within the detail, with a number of sources indicating that there has been a level of jiggery-pokery with regards to the classification of loans between owner-occupiers and investors (since there is now a clear price incentive to opt for homebuyer loans).</div>
<div> </div>
<div>The second chart below shows that owner-occupier commitments and refinancing have both increased solidly, while APRA's macroprudential measures have ensured that investor finance is now falling away quickly.</div>
<div> </div>
<div>The net result was that total housing finance in trend terms remained flat in the month at $33.2 billion.</div>
<div> </div>
<div><a href="/images/2015/12/9/HF2.jpg" target="_blank">Click to enlarge</a></div>
<div><img src="/images/2015/12/9/HF2.jpg" alt=""></div>
<div> </div>
<div>
<div>Whether or not housing markets can push forward in 2016 will depend upon the extent to which the growth in owner-occupier loans can offset declining investor lending. </div>
<div> </div>
<div>Certainly we can see that the number of owner-occupier loans is trending up, but equally there is a chance that tightening mortgage rates could slow this sector of the market going forward.</div>
<div> </div>
<div><a href="/images/2015/12/9/HF3.jpg" target="_blank">Click to enlarge</a></div>
<div> </div>
<div><img src="/images/2015/12/9/HF3.jpg" alt=""></div>
<div> </div>
<div>
<strong><span style="text-decoration: underline;">State versus state</span></strong><br><br><div>Skipping down to the state level we can see that the trend number of owner-occupier commitments is in decline in Western Australia, Tasmania, the Northern Territory, and Queensland, which is home to a significant number of declining regional markets in line with the resources investment collapse.</div>
<div> </div>
<div>The trend in the number of owner-occupier commitments in the Australian Capital Territory has been stone dead flat for months.</div>
<div> </div>
<div>The increase in the number of mortgages written has been driven purely by the two most populous states, New South Wales and Victoria. </div>
<div> </div>
<div><a href="/images/2015/12/9/HF4.jpg" target="_blank">Click to enlarge</a></div>
<div><img src="/images/2015/12/9/HF4.jpg" alt=""></div>
<div> </div>
<div>
<div>Generally speaking the higher value loans are written in the capital cities, and as such the dollar value of owner-occupier commitments tends to be a better indicator of what is playing out in the capitals.<br><br>In terms of the trend <strong>value</strong> of owner-occupier commitments, both Western Australia and the Northern Territory are again in decline. </div>
<div> </div>
<div>The Brisbane market is faring relatively well at the present time, helping to nudge the aggregate value of owner-occupier commitments in Queensland steadily up, while Victoria and New South Wales in particular are rising fast.</div>
<div> </div>
<div>In fact, trend monthly owner-occupier commitments in New South Wales have ripped up the chart to sit some 43 per cent higher over the year at more than $8 billion (awooga!).</div>
<div> </div>
<div><a href="/images/2015/12/9/HF5.jpg" target="_blank">Click to enlarge</a></div>
<div><img src="/images/2015/12/9/HF5.jpg" alt=""></div>
<div> </div>
<div><span>As noted, when it comes to housing finance the devil is always in the detail: more than $3 billion of the New South Wales monthly figure related to refinancing, and over the past year there has also been a slight uptick in finance for renovations.</span></div>
<div><span> </span></div>
<div><a href="/images/2015/12/9/HF6.jpg" target="_blank"><span>Click to enlarge</span></a></div>
<div><span><img src="/images/2015/12/9/HF6.jpg" alt=""></span></div>
<div> </div>
<div> </div>
<div>
<div>
<strong><span style="text-decoration: underline;">The wrap</span></strong><br><strong><span style="text-decoration: underline;"><br></span></strong>
</div>
<div>Overall, there are many more different trends to cover than can be analysed in one blog post - it was a solid result nationally, and it all rather depends upon which market you are interested in.</div>
<div> </div>
<div>One thing that we can say with certainty is that the investor boom is a cooked goose for this cycle, with investor finance now down by 9.2 per cent year-on-year. In 2016, the homebuyer sector of the market will swim back into focus.</div>
<p> </p>
<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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</div>
</div>
</div>
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Investor boom is a cooked goose: Pete Wargent

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<p><span>The Christmas break is often a time when Australian expatriates buy properties back in Australia to eventually occupy as their home when their overseas assignments end. </span></p>
<p><span>"We expect given the low Australian dollar, that this summer will see many more expats actively looking for a property back here in Sydney," estate agent Vicki Laing noted. </span></p>
<p><span>"There are great buying opportunities for cashed-up expats given the softening state of the Sydney market."</span></p>
<p><span>The Australian dollar briefly dipped this year below US70¢ for the first time since April 2009, down from US81c in January 2015, and at US$1.10 in mid-2011. It was around 71c in mid-December.</span></p>
<p><span>Many see it going and staying in the 60s during 2016.</span></p>
<p><span>Vicki Laing said while the low dollar was having an emerging impact on the willingness of Australian expats to buy, there were many familial influences always motivating them to buy property in Australia including schooling issues.</span></p>
<p><span>"These are not influenced by the state of the dollar," she said.</span></p>
<p><span>Expat interest is beginning to emerge in select pockets highlighted in early spring when three of the five registered bidders for a Belle Manly auction offering were expats.</span></p>
<p><span>It sold for $4,550,000 under the hammer with the buyer from Singapore beating buyers from the UK and the USA for 8 Bower Street overlooking Cabbage Tree Bay.</span></p>
<p><span>But many agents aren't seeing any increase in expat numbers.</span></p>
<p><span>"I would like to say that the expats are back in strength given Australia’s currency is now at a six year low however that’s simply not the case," Mosman Richardson &amp; Wrench agent Robert Simeon said.</span></p>
<p><span> "With the Australian dollar weaker, property is around 25% cheaper than the A$0.94c it was just 24 months ago for those who are paid in foreign currencies," Robert Simeon noted.</span></p>
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jonathanchancellor-7SQnKwU6yx

Lower Aussie dollar tempting expats to buy back home

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<p><span>The weak Australian dollar is good news for Australian expats!</span></p>
<p><span>They can invest in property cheaper from money earned abroad.</span></p>
<p><span>Australians who bought property in the US during the global financial crisis when housing prices crashed in many parts of the country, including Las Vegas, can reap the benefits now as a stronger US economy and dollar mean rising rental income and strong capital growth. </span></p>
<p><span>The Australian dollar fell to six-year lows in September. It has recovered since then, and was hovering around 0.71 to the US dollar by late December.</span></p>
<p><span>A weak local dollar would only mean those Australians who brought property in US can now find a profitable route to bring their money home: invest in property in Australia.</span></p>
<p><span>According to Greville Pabst, chief executive of property valuers and consultants WBP Property Group, a falling Aussie dollar represents positive news for expatriates, with the improved conversion rate giving them “greater buying power”.</span></p>
<p><span> </span></p>
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j.ballantyne1990-6AQqhLzZaK

Expats cashing in on weak Aussie dollar for property investment

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<h3 class="post-title entry-title"> </h3>
<div id="post-body-4441479046766558951" class="post-body entry-content">
<p>Looks like someone forgot to tell Sydney's inner west about its alleged oversupply of apartments.</p>
<p><span>Erko.</span></p>
<br><div class="separator"><a href="/images/2016/04/22/Erko.jpg" target="_blank">Click to enlarge</a></div>
<div class="separator"> </div>
<div class="separator"><img src="/images/2016/04/22/Erko.jpg" alt=""></div>
<br><br>St. Peters.</div>
<div class="post-body entry-content"> </div>
<div class="post-body entry-content">
<a href="/images/2016/04/22/St%20Peters.jpg" target="_blank">Click to enlarge</a><br><br><div class="separator"><img src="/images/2016/04/22/St%20Peters.jpg" alt=""></div>
<br><br><div>You can also add to this Haberfield, Stanmore, Sydenham, Five Dock, Canada Bay, Abbotsford, Chiswick, etc. etc. all of which have remarkably tight vacancy rates of 1 per cent or under. </div>
<br><div>In fact, stretching the tarp out a bit further, and while on the subject, you might also add Surry Hills, Ultimo, Darlinghurst, Botany, Banksmeadow, Roseberry, Eastlakes, Redfern, Waverley, Bronte, Coogee, South Coogee, Pagewood, Maroubra...</div>
<br><div>Heck even Waterloo and Zetland have a vacancy rate of 0.5 per cent (OK, so that one might not a real number).</div>
<br><div>Maybe when we start to see some numbers beginning with a 4-handle it might start to get interesting, but if anything, for quality properties at least, the rental market actually seems to be tightening and rents rising. </div>
<div> </div>
<div>Out west? Maybe a different story there, granted.<br><br><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>
<strong><span style="text-decoration: underline;"><br></span></strong>
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No inner west Sydney rental oversupply: Pete Wargent

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<div>Dwelling prices steadied in the first quarter of 2016. </div>
<div> </div>
<div><a href="/images/2016/07/04/B4.jpg" target="_blank">Click to enlarge</a></div>
<div><img src="/images/2016/07/04/B4.jpg" alt=""></div>
<div> </div>
<div>With share markets also down a notch in the first quarter, total household net worth ticked down marginally to $8,64 trillion. It was the first such quarterly decline since September 2011.</div>
<div> </div>
<div><a href="/images/3_StockBreakouts/B1.jpg" target="_blank">Click to enlarge </a></div>
<div class="separator"><img src="/images/3_StockBreakouts/B1.jpg" alt=""></div>
<div class="separator"> </div>
<div>Australians have about $4 trillion in net worth or equity tied up in housing. Sounds like a lot, but then in the UK - where there is no compulsory superannuation - the share of housing wealth has been tracking at close to two thirds of total household net worth according to the Office for National Statistics. </div>
<div> </div>
<div>Australia's average net worth per capital therefore ticked to just a notch below $360,000, which is still exceptionally strong. </div>
<p><a href="/images/2016/07/04/B2.jpg" target="_blank"> Click to enlarge</a></p>
<p><img src="/images/2016/07/04/B2.jpg" alt=""></p>
<p><br><strong><span style="text-decoration: underline;">Gearing measures</span></strong></p>
<p>On the matter of housing affordability, the interest payable to income ratio increased for a second successive quarter, although it remains 37 per cent below its 2008 peak. </p>
<p><a href="/images/2016/07/04/B3.jpg" target="_blank">Click to enlarge </a></p>
<div class="separator"><img src="/images/2016/07/04/B3.jpg" alt=""></div>
<div> </div>
<div class="separator">Gearing ratios ticked a bit higher, both for mortgage debt to housing assets (28.6 per cent) and for debt to assets (20.5 per cent).</div>
<p><a href="/images/2016/07/04/B5-1.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/07/04/B5-1.jpg" alt=""></p>
<div>Overall, Q1 was a soft quarter for household net worth.</div>
<div> </div>
<div>However, CoreLogic reported today that both Sydney houses (+6.8 percent) and apartments (+6.7 percent) surged in value in the June quarter, so household net worth will no doubt increase again in Q2.</div>
<div> </div>
<div>Houses and units across the eight capital cities grew by +3.8 percent and +3.7 percent in the June quarter respectively. </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>
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Record household wealth takes a breather: Pete Wargent

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<p><span style="line-height: 1.3em;">The number of auctions due to be held across the capital city markets this week will remain relatively steady, with CoreLogic currently tracking 1,758 auctions, down from 1,876 last week. </span></p>
<p><span style="line-height: 1.3em;">In Australia’s largest auction market of Melbourne, 778 auctions are scheduled this week, following a higher 871 last week, while in the second largest auction market of Sydney, the number of auctions being held this week (669) is higher relative to last week (647).</span></p>
<p>Last year, 2,599 auctions were held over the comparable week, which is substantially higher than the activity CoreLogic is tracking this week. This is reflective of what has been seen across the auction market so far this year.  Over the 2016 calendar year to date, 29,426 capital city auctions have been held, compared to 32,616 over the same period last year.</p>
<p><span style="text-decoration: underline;"><strong>Capital City Auctions this week:</strong></span></p>
<ul>
<li><strong>Sydney: 669</strong></li>
<li><strong>Melbourne: 778</strong></li>
<li><strong>Brisbane: 117</strong></li>
<li><strong>Adelaide: 84</strong></li>
<li><strong>Perth: 37</strong></li>
<li><strong>Canberra: 65</strong></li>
</ul>
<p>This week, Mosman in Sydney is the busiest individual suburb for auctions, with CoreLogic tracking 16 auctions so far this week. Following Mosman are three Melbourne suburbs, Glen Waverley and Richmond, with 13 auctions scheduled and Thomastown with 12 auctions.</p>
<p><span style="text-decoration: underline;"><strong>Summary of last week’s results:</strong></span></p>
<p><a href="/images/2016/05/20/20160519-capital-city-table.png" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/05/20/20160519-capital-city-table.png" alt=""></p>
<p>Final results show that clearance rates strengthened last week, up from 67.7 per cent the previous week to 69.5 per cent, bringing the combined capital city clearance rate back in line with results seen towards the end of last month. The latest result marks the seventh consecutive week where the capital city clearance rate was under the 70 per cent mark, however this isn’t the case for Melbourne (71.3 per cent) and Sydney (76.2 per cent), where clearance rates were above 70 per cent for the sixth week in a row for Melbourne and the fourth week in a row for Sydney.</p>
<p><a href="/images/2016/05/20/20160519-capital-city.png" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/05/20/20160519-capital-city.png" alt=""></p>
<p>Last week, in each of the smaller capital city markets, clearance rates were up on a week-on-week basis.</p>
<p>Looking at some of the key regional auction markets, clearance rates were strongest in Wollongong (73.9 per cent) and Geelong (80.8 per cent) last week, however the number of auctions held in both regions was lower than over the previous week. In the two Queensland lifestyle markets of the Gold Coast and Sunshine Coast, less than half of all reported auctions cleared last week.</p>
<p><a href="/images/2016/05/20/20160519-sub-regions.png" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/05/20/20160519-sub-regions.png" alt=""></p>
<p> </p>
<div class="sharedaddy sd-sharing-enabled"> </div>
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Weekend auction numbers steady: CoreLogic RP Data's Shana Miller

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<p>My housing supply dashboard showed how dwelling completions have been tracking well ahead of population growth in Western Australia. </p>
<p>And now SQM Research has reported that vacancy rates in Perth rose again to 5 per cent in June, in turn suggesting that Perth's property downturn still has a way to run.</p>
<p>Indeed, vacancy rates edged higher in most cities in June, Adelaide and Darwin excepted.</p>
<div id="post-body-1509958214451859734" class="post-body entry-content">
<div> <a href="https://www.propertyobserver.com.au/images/2017/07/20/B1.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/2017/07/20/B1.jpg" alt=""></div>
<br><div>The below chart smooths vacancy rates on a 6mMA basis. </div>
<div> </div>
<div>While not a true reflection of 'trend', since it doesn't account for the higher vacancy rates typically experienced over the Christmas period, it does show that Perth and Darwin have experienced consistently elevated vacancies since the peak of the resources construction boom. </div>
<div> </div>
<div><a href="https://www.propertyobserver.com.au/images/2017/07/20/b2.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/2017/07/20/b2.jpg" alt=""></div>
<br><div>Asking rents for houses in Perth have declined by 6 per cent over the past year, while in Darwin the equivalent figure is as high as 11 per cent. </div>
<div> </div>
<div>Record apartment completions have taken some heat out of asking rents in Sydney and Melbourne -with Melbourne vacancy rates bouncing off 7-year lows - though apartment rents remain higher year-on-year in both of the most populous capital cities by 3 per cent and 6 per cent respectively.</div>
<div> </div>
<div>The average asking rent for a 3-bedroom house in Sydney is now $725/week, and for units the figure is $522/week.</div>
<div> </div>
<div>Vacancy rates remain tight in Canberra at 1.2 per cent, and extremely tight in Hobart at 0.7 per cent, leading to soaring rents for houses in the Tasmanian capital.</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>
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Perth, Darwin rents still falling

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<p class="p1"><span class="s1">While on the subject of dwelling price indices, CoreLogic's index results to 31 July showed capital growth across the combined capital cities of +10.5 per cent over the year to July. </span></p>
<p class="p1"><span class="s1">The quarterly price increased across the capital cities slowed to +2.2 per cent in July, down from a pacy +3.6 per cent in February.</span></p>
<p class="p1"><span class="s1">Sydney houses (+12.3 per cent) and units (+10.3 per cent) have continued to be strong performers over the year to July 2017.</span></p>
<p class="p1"><span class="s1">Growth in Melbourne house prices has accelerated to a thumping +17.2 per cent, although unit prices (+4.6 per cent) have lagged. </span><span style="font-size: 12.16px;"> </span></p>
<p class="p1"><span class="s1">Overall, this helped to take the median capital city dwelling price to a new high of $625,000.</span></p>
<p class="p1"><span class="s1">The rest of state figures increased by +5.4 per cent over the year to July, to $382,500.</span></p>
<p class="p1"><a href="https://www.propertyobserver.com.au/images/2017/08/07/CL.jpg" target="_blank"><span class="s1">Click to enlarge</span></a></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/2017/08/07/CL.jpg" alt=""></span></p>
<p class="p1"><span class="s1"> </span></p>
<p class="p1"><span class="s2"><strong>Rental price growth returns</strong></span></p>
<p class="p1"><span class="s1">CoreLogic's quarterly showed a return to annual rental price growth, following a crackdown on lending to investors. </span></p>
<p class="p1"><a href="https://www.propertyobserver.com.au/images/2017/08/07/DGF71qyUMAATak6.jpg-large.jpeg" target="_blank"><span class="s1">Click to enlarge</span></a></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/2017/08/07/DGF71qyUMAATak6.jpg-large.jpeg" alt=""></span></p>
<p class="p1"><span class="s1"> </span></p>
<p class="p1"><span class="s1">The rental price growth was driven by Sydney, (+4.5 per cent) Melbourne (+4.1 per cent), Hobart (+6.2 per cent), and Canberra (+8.4 per cent).</span></p>
<p class="p1"><span class="s1">These rental price gains were offset by declines in Darwin and Perth.</span></p>
<p class="p1"><span class="s2"><strong>Perth levelling out</strong></span></p>
<p class="p1"><span class="s1">CoreLogic noted that Perth appears to be approaching the bottom of its market cycle, with prices easing by -0.3 per cent over the three months to July. </span></p>
<p class="p1"><span class="s1">Prices in the Western Australian capital have declined by -10.2 per cent since the market peak in 2014.</span></p>
<p>Transaction volumes in Perth have also found a floor at 2,500 per month, while listing numbers have also declined.</p>
<p class="p1"><span class="s1">The "mining cliff" has now been <span class="s4">effectively seen off<a href="https://petewargent.blogspot.com.au/2017/06/mining-cliff-seen-off">,</a></span> too.</span></p>
<p class="p1"><span class="s1">These are positive numbers, though I do note that my <span class="s4">dwelling supply dashboard</span> implies that there will yet be a lot of new dwellings to be absorbed!</span></p>
<p class="p1"><span class="s1"> </span></p>
<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>
<p class="p1"><span class="s1"> </span></p>
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Is the Perth property market finding a floor?

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<div>
<span style="line-height: 1.3em;">In the past week the ABS released its </span><span style="line-height: 1.3em;">Construction Activity</span><span style="line-height: 1.3em;"> figures for the June 2015 quarter, which pull together data on building and engineering construction.</span>
</div>
<div> </div>
<div>As you can see below total construction surprised in jumping back up by a seasonally adjusted +1.8% in Q2 to sit above $50 billion in chain volume measures terms.</div>
<div> </div>
<div>The rebound was driven by a surge in engineering construction (see the blue shaded area in the graphic below), which rose by +5.7% in the quarter, although with fewer large projects in the pipeline this sector will soon enough resume its inevitable decline over the next couple of years. </div>
<div> </div>
<div>Given the sheer size of the engineering construction sector at $26.7 billion of work done in the June quarter, the downturn is will continue to act as a material drag on economic growth for quite some time.</div>
<div> </div>
<div>The red shaded area below shows that residential building work declined in the June quarter by -2.9% to $14.7 billion, despite still being up by +7.6% over the year. </div>
<div> </div>
<div>Non-residential building, denoted by the yellow shaded area below, has not really contributed a great deal to growth, having actually declined by -1.2% over the past year. </div>
<div> </div>
<div><a href="/images/2015/10/19/CONS1.jpg" target="_blank">Click to enlarge</a></div>
<div><img src="/images/2015/10/19/CONS1.jpg" alt=""></div>
<div> </div>
<div>
<div><strong><span style="text-decoration: underline;">Apartment approvals to decline</span></strong></div>
<div> </div>
<div>While there is still a high volume of residential building approvals in the pipeline - which is expected to see housing starts remain strong across the next financial year - it appears that the peak in construction activity may be in for the cycle.</div>
<div> </div>
<div>Although defaults relating to apartment pre-sales have been low to date and indicators of household financial stress benign, developers will be increasingly reticent to lend against high density projects in certain inner city areas, particularly in Melbourne and Brisbane.</div>
<div> </div>
<div>If you take a walk around Fortitude Valley/Newstead (see my photos <a href="https://petewargent.blogspot.co.uk/2015/08/cranewatch-newstead" target="_blank">here</a> for an idea of what I'm referring to), or West End/South Brisbane (see my photos <a href="https://petewargent.blogspot.co.uk/2015/02/brisbane-apartments-part-deux" target="_blank">here</a> for more of the same) it is not hard to see why, with building approvals as a percentage of existing dwelling stock already tracking at an elevated level.<br><br>Brisbane CBD faces similar challenges as I looked at with some photos <a href="https://petewargent.blogspot.com.au/2015/01/brisbane-apartments" target="_blank">here</a>, as does Melbourne in certain inner city locations.</div>
<div> </div>
<div>The is a glut of apartment building coming online in these areas which will see vacancy rates rise and rents fall, and it follows there is no requirement for further apartment approvals.</div>
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<div>Indeed, we already know that DA lodgements in Brisbane began to fall quite sharply earlier in the year. </div>
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<div>This is one of the risks identified by the <a href="https://www.rba.gov.au/publications/fsr/2015/oct/html/contents" target="_blank">Reserve Bank</a> of a property cycle which is driven largely by investors - speculative demand can lead to a sharp supply response. </div>
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<div>In this case it comes in the guise of rapid increase in construction activity in the apartment sector, and in turn a future supply overhang.</div>
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<div><strong><span style="text-decoration: underline;">Implications</span></strong></div>
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<div>While work in the pipeline should keep residential building activity humming along at a historically high level - and a boom in major renovations work could even see total residential activity rise a little from here - there appears to be little hope that the sector can contribute a great deal more to economic growth than it already has.</div>
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<div>Since engineering construction is also set to decline over the next couple of years, it is perhaps little wonder that future markets are beginning to look for further interest rate cuts (plural) towards a cash rate of just 1.50%. </div>
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<div>While forecasters are expecting the economy to grow at a moderate pace in Q3, on the evidence of the above numbers there could potentially be some downside risk, particularly if resources construction resumes its contraction. </div>
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<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>
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